Donald Trump garnered 76,789,621 votes (50 percent) against Kamala Harris’s 74,273,395 votes (48.4 percent), winning the electoral college 312 to 226. His victory hinged on a decisive sweep of seven battleground states and a shift in the voting electorate.
The National Exit Poll by Edison Research, suggests that Trump forged a multiracial/multiethnic working-class coalition of voters, specifically non-college-educated individuals with household incomes below $100,000. Groups of voters that historically tended to vote Democratic switched toward Trump this election: 55 percent of Latino men, 53 percent of white women, 39 percent of Asians, 65 percent of Native Americans, 45 percent union households, and 56 percent of first-time voters supported him. In contrast, only Black women (90 percent), LGBTQ+ individuals (86 percent), Jews (80 percent), and the nonreligious (71 percent) overwhelmingly backed Harris. This marks a significant change, as traditional predictors of voting patterns in the U.S. seem to have shifted from race, gender, age, and geography to education and income.
Despite Trump’s controversial history, unsound economic proposals, and questionable character — two impeachments, 34 felony convictions, civil judgments for defamation, sexual assault, and business fraud, inciting an insurrection to block the peaceful transfer of constitutional power, repeated sexist, racist, and contentious remarks, and endless mendacity — many voters seem more motivated by nostalgia for better economic times pre-COVID and concerns about immigration.
Trump’s second term is expected to bring disruptive and consequential change because Trump will have largely unchecked power. Trump will control the executive branch through ultimately some 2,000 ultra-loyalists appointees who will run the federal bureaucracy, has a compliant Republican Party in control of both chambers of the Legislature, a conservative majority in the Supreme Court, and significant sway in seven out of 10 circuit appeal courts, where conservative Republican-appointed judges outnumber liberal Democratic-appointed judges and among federal district judges, and some influence among district judges because he appointed 26 percent of them in his first term.
The USVI will be affected in two direct ways by the new Trump administration: (1) via changes in domestic and international trade economic policies (i.e., reduction in government spending and taxes and imposition of tariffs); and (2) via changes in governing priorities and personnel in the key federal partner agencies that serve the territory such as the Departments of Interior (Office of Insular Affairs), Health and Human Services, Housing and Urban Development, Homeland Security (FEMA, ICE, CBP, Coast Guard), Commerce (EDA, BEA, NOAA), Education, Labor, Transportation and Environmental Protection Agency.
Economic and Trade Impacts on the USVI
Because the territory faces so many intertwined challenges, anemic economic growth, mismanaged public finances, inadequate infrastructure, an undiversified economic base, housing unaffordability, an extraordinary high cost of living and is quite reliant on federal assistance, radical policy changes by the new Trump administration will most likely have outsized effects.
Trump’s main proposed economic changes highlighted in bold are individually assessed below for how they will most likely affect the USVI if implemented.
Increased Tariffs: Plans to raise tariffs by 20-60 percent on imports will lead to higher living costs since the USVI imports 95 percent of its goods. A further increase in the already high cost of living, will reduce profit margins for businesses, reduce purchasing power, and will likely stimulate even more business closings and more out-migration. The World meter estimates that the population of the USVI in 2024 is at 84,000, below the 2020 Census estimate of 87,176, which in turn represented an 18 percent drop from the 2010 Census. The extraordinarily high cost of living with unmatched increases in real income is not sustainable.
Massive Deportation of the Undocumented: Mass deportations could disrupt vital labor markets in the USVI such as construction, landscaping, and hospitality, where many undocumented immigrants work. The USVI has a backlog of disaster recovery projects to complete and skilled and unskilled construction workers are crying need.
Extended Tax Cuts: Extending the 2017 tax cuts and possibly reducing corporate tax rates from 21 percent to 15 percent would shrink revenues, increase deficits and debts at both the national and the local level. Frist, the financial position of the local government is already precarious, with falling revenues, high debt per capita, a subpar credit rating, and limited days of cash on hand, therefore a smaller tax take will exacerbate the situation. Second, worsening deficits and debts on the national level will contribute to rising interest rates because the U.S. Treasury would have to issue more bonds to finance shortfalls, which in turn increases the cost of borrowing for USVI residents, dampening private business investments, mortgage approvals, and consumer financing.
Rapid Deregulation Without Cost-Benefit Analysis or Other Evidence-based Assessments: Plans for substantial deregulation in environmental, consumer, and labor protections could threaten public health, safety, and financial market stability. In the territory, for example, the interventions of federal EPA regarding a troubled derelict oil refinery have protected the health and safety of Crucians. Because local environmental enforcement capacity of environmental issues is very weak, a strong federal partner compensates to assure a minimum of protection. Cutting regulations, haphazardly for ideological reasons and not with careful assessment, will expose residents to even more risks.
Pro-Fossil Fuel Energy Policies and Climate Change Denialism: A national focus on fossil fuel extraction at the expense of renewable energy efforts contradicts the need for a reduction in carbon emissions by one of the world’s leading polluters. The USVI, which lies in the North Atlantic hurricane belt, will become more and more vulnerable to more frequent and severe windstorms, droughts, floods, and sea level rise, all associated with unchecked global warming.
Overall, Trump’s proposed economic policies are likely to exacerbate inflation, dampen growth, reduce incomes, contravene and undermine efforts to mitigate climate change, and hasten further population decline in the territory.
Changes in Federal Partner Agencies
The Trump administration’s planned cuts in federal government employment, radical restructuring, and the adoption of a new priority to eliminate waste and improve efficiency, might lead to reduced federal assistance to the USVI, which the territory heavily relies upon for its budget.
Historically, the key federal partner agencies have been generous, attentive, sympathetic, and forbearing in the administration of aid to the territory, regularly extending and renewing grants, instead of cancelling or reprograming undisbursed amounts. Moreover, they have tended to be lenient on grant and program evaluations and not hold us accountable for poor project supervision and execution. Now with Trump senior political appointees at the helm and a mandate to eliminate waste and reduce spending, the key federal partner agencies might adopt stricter criteria for grants and support, impacting critical services in the USVI.
Recommendations
As the next four years unfold, it would be wise for local government leaders to take proactive steps to mitigate likely adverse impacts, namely, avoid confrontations with prominent MAGA figures, do not invite them to the islands or court them, try not to draw attention to our unsatisfactory record of project execution, and most importantly, improve all around governance, execute federally financed projects and programs better, and beg for assistance only when absolutely necessary.
In conclusion, it is highly likely that the people of the USVI will have to suck even more salt.
— Dr. Mark D. Wenner is an economics professor at the University of the Virgin Islands.
Editor’s Note: Opinion articles do not represent the views of the Virgin Islands Source newsroom and are the sole expressed opinion of the writer. Submissions may be made to visource@gmail.com.
