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    • Trump’s tariffs, policies spell uncertainty for Oklahoma, OKC economy
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    Trump’s tariffs, policies spell uncertainty for Oklahoma, OKC economy

    Online Niel Posted on

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    The Oklahoma economy is healthy, but economists say much of that success can be attributed to Oklahoma City’s focus on jobs, education and quality of life.

    Economists Robert Dauffenbach, Russell Evans, Chad Wilkerson, Mark Sneed and Andrew Busch, appearing on behalf of the Greater Oklahoma City Chamber, also warned of future uncertainty with drastic changes likely with Donald Trump’s return to the White House.

    Dauffenbach, a longtime economist at the University of Oklahoma, warned that while “there’s certainly a lot of reason to be optimistic,” unchecked federal budget growth looms as a serious threat to the local and national economy.

    “We had a federal deficit of $1.8 trillion in fiscal year 2024,” Dauffenbach said. “We collected only 73 cents for every dollar spent. The Congressional Budget Office estimates that deficits will grow to $2.9 trillion over 10 years, assuming current law, which calls for Trump’s tax cuts (from his first term) to be repealed in 2025.”

    More: Education, health care, immigration, industry brace for change with Trump’s second presidency

    However, Trump has indicated he wants to continue the tax cuts, which the Manhattan Institute predicts will increase the annual deficit to $3.8 trillion by 2034.

    “The deficit hawks have been with us for decades, predicting that catastrophe is just around the corner,” Dauffenbach said. “I don’t think this problem is going to stop. He will be with us for a long time.”

    “Oklahoma City clearly has something very, very right”

    Meanwhile, metro Oklahoma City’s economy is performing “exceptionally,” Dauffenbach said. Statewide nonfarm payroll employment has increased 4.9 percent since January 2020, which was just before the pandemic began. The nation, meanwhile, is growing by 4.6 percent. Tulsa’s rate is 4.2% and Oklahoma City’s rate is 7.6%.

    “Oklahoma City is clearly doing something very, very well,” Dauffenbach said. “I think it goes back to the sense of unity that we have with the focus on education and quality of life facilities. I think that will continue to pay off.”

    Russell Evans, an economist at Oklahoma State University, said at one point the loss of thousands of oil and gas jobs in the state would have been seen as an economic disaster for the state.

    “Our biggest concern for a long time has been oil and gas,” Evans said. “Since 2016, Oklahoma has lost 30,000 oil and gas jobs. But what we’ve found is that as a condition we can manage without it.”

    Economists all expressed an upbeat outlook for the energy industry, with Trump’s proposed policies aimed at reducing regulations and making it easier to export to Midwest states.

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    All economists agreed that the economy, and inflation in particular, continues to be a big concern among consumers, including in Oklahoma City.

    “We see a struggling consumer market versus a healthy labor market,” Dauffenbach said. “Oklahoma City continues to walk the tightrope. If anything pushes the consumer off that tightrope, we see a tough time for the economy.”

    Will Trump’s Proposed Tariffs Hurt Oklahoma’s Economy? It is not clear

    Economists disagreed on whether Trump’s proposal to raise tariffs would result in the economic meltdown that similar policies led to at the start of the Great Depression.

    Mark Sneed, president of RegionTrack, an economic research firm in Oklahoma City, cautioned against taking all credit for Trump. tariff increases it will come true.

    “We don’t really know what the outcome of these tariffs will be,” Sneed said. “I don’t think you can get broad tariffs through Congress, whether they’re Democrats or Republicans.”

    Busch contested that Trump could declare the nation’s trade deficit a national emergency to pass tariff hikes without congressional approval.

    Busch also warned that eliminating Social Security taxes would reduce revenue flowing into the program’s trust fund, leading to a deficit before the 2033 target date.

    Disturbances in China’s economy due to massive housing overbuilding, geopolitics and increased severe weather are all threats to both the local and national economy.

    Busch showed a chart that backs up the arguments of critics of President Joe Biden immigration increased by 9.3 million from 2021.

    “Economically, the secret is that this is fantastic,” Busch said. “I’m not talking socially, legally or not, but from a GP perspective (gross profit), this is important.”

    The labor shortage, which began at the end of the pandemic and has only gotten better this year, will worsen if mass deportations are implemented, Busch said.

    Busch also ventured into the topic of climate change, a controversial topic among some Oklahoma politicians and business leaders. Insurance companies, he said, are raising rates and pulling out of states including Florida and Texas.

    “I don’t care what you think about the climate,” Busch said. “What you should care about is what the insurance companies think about it. They lost $32 billion to storms last year and $50 billion this year.”

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