Analysis Trump’s biggest challenge: remaking the US economy

President Donald Trump’s economic plans are nothing if not ambitious: Annual growth of 4 per cent — or more. A diminished trade gap. The creation of 25 million jobs over 10 years, including the return of good-paying factory positions.

It all adds up to an immense challenge, one that Trump aims to achieve mostly by cutting taxes, loosening regulations, boosting infrastructure spending and renegotiating or withdrawing from trade deals. At the top of his agenda: Pulling out of the 12-nation Pacific trade agreement and rewriting the North American Free Trade Agreement to better serve the United States.

Yet to come anywhere near his goals, economists say Trump would have to surmount at least a handful of major hurdles that have long defied solutions.

He may yet succeed. But he faces deep-rooted obstacles that have bedevilled presidents from both parties for years.

Trump’s goal of vastly expanding manufacturing would require at least the partial reversal of a decades-long trend toward a service-oriented economy and away from factory work. Former President Barack Obama sought to add 1 million manufacturing jobs in his second term but came up two-thirds short.

Even if Trump could return factory production to its heyday by toughening trade deals and threatening to slap tariffs on America’s trading partners, a surge of new jobs wouldn’t necessarily follow. The increased use of robots and automation has allowed factories to make more goods with fewer workers. Research shows that automation has been a bigger factor than trade in the loss of US factory jobs.