As President Donald Trump began his second term, he swiftly signed executive orders aimed at fulfilling his promises of lower taxes, lower prices, and a stronger economy. However, achieving these goals will require additional steps and support from Congress. Here are five ways a second Trump administration could impact your finances.
### 1. Potential Tariffs Leading to Higher Prices
Tariffs remain a wildcard in Trump’s economic strategy. His campaign promises included tariffs on all imports, goods from Mexico and Canada, and products from China. How these tariffs will be implemented and their impact on prices is a matter of ongoing debate.
### 2. Changes in Tax Rates and Deductions
Without congressional action, tax breaks set to expire could lead to higher taxes for many taxpayers. Ballooning federal debt adds complexity to the debate on extending provisions from the Tax Cuts and Jobs Act. The battle over state and local tax deductions is expected to be a key point of contention.
### 3. Potential Increases in Health Care Costs
Cuts to health care programs may be necessary to fund tax proposals, potentially impacting subsidies under the Affordable Care Act. Premiums could rise for some individuals if these subsidies are not extended by Congress.
### 4. Credit Card Interest Rates
A proposal for a temporary 10% cap on credit card interest rates could benefit those with credit card balances, but it may also restrict access to credit. While the likelihood of a cap is low, the attention to this issue suggests it is worth monitoring.
### 5. Increased Market Volatility
With numerous policy changes expected, market volatility is anticipated. Understanding personal financial situations is crucial to weathering market fluctuations, particularly for long-term goals like retirement. It may be necessary to ride out market turbulence to achieve financial objectives.
