Could Trump’s economic policy succeed (from a US viewpoint)?

The economic policy being implemented by Donald Trump consists mainly in: A policy to stimulate domestic demand (expansionary fiscal policy, with a large corporate tax cut and possibly pressure in the future on the Federal Reserve for it to not increase its interest rates too much) at a time when the United States is very close to full employment; The introduction of tariffs. This policy may be dangerous: The expansionary fiscal policy at full employment will exacerbate the US external deficit, which could have very negative effects (depreciation of the dollar and deterioration in the terms of trade, higher long-term interest rates) if foreign lenders refuse to hold much more US external debt; Protectionism reduces domestic output if the substitutability between domestic production and imports is low, if tariffs are not paid back to domestic economic agents, or if retaliatory measures on the pa r t of other countries reduce exports. Trump’s policy will therefore only be able to succeed if it manages to stimulate not only demand for goods and services , but also the supply of goods and services. This will be the case if: The reduction in corporate taxes increases corporate investment and the increase in investment lifts labour productivity; The sti mulation of demand at full employment leads companies to become more efficient (increase productivity) or attracts more people to the labour force (increase s the participation rate); The p rotectionism leads to onshoring back to the United States. For the time being , we see only a modest upturn in productivity gains and a level of direct investment into the United States that is high , but not more so than in the past.