Hello and welcome to EconMinute. Today we’re looking at a striking claim from Donald Trump: that Americans consume too much. The Economist notes consumption has soared to nearly 68% of GDP, the highest since the 1950s, while national saving has sunk to just 16%, a postwar low.

Trump’s remedy? A so-called “revenge tax” on imports. He argues that tariffs would “make America rich again” by squeezing foreign-made goods, boosting domestic output and shrinking the trade deficit. But as The Economist warns, import taxes are ultimately paid by US consumers. Modelling suggests consumption might fall by just 0.4%, while GDP could rise by only 0.3%.

The deeper problem lies elsewhere. Low saving rates reflect aging populations, low interest rates and a wealth effect. As The Economist puts it, “Americans are living off a pile of past and future riches.” Real change, the magazine argues, demands more investment in education, infrastructure and reform—not simply higher prices at the checkout.

That’s today’s EconMinute insight on Trump’s consumption critique.
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