Ever since Kamala Harris became the Democratic Party’s presumptive nominee in the 2024 presidential election campaign, analysts have scrambled to get a clearer sense of her policies—not just how they differ from Republican nominee and former President Donald Trump’s, but also if there’s any daylight between her and President Joe Biden, her current boss.

While the Harris campaign has only just started to reveal aspects of its economic agenda, it continues to benefit from enthusiasm about her candidacy. According to a new survey conducted by the Financial Times and the University of Michigan’s Ross School of Business, more Americans trust Harris to handle the U.S. economy than Trump. While Harris is only ahead by a single percentage point, it marks the first time since the survey began nearly a year ago that the Democratic nominee is ahead of Trump.What do we know so far about how the two campaigns differ on global economic policy? On some issues, such as migration or the strength of the dollar, there is considerable divergence between the candidates. But there are other areas, such as industrial policy and competition with China, where Harris and Trump are not far apart. For more detail, I spoke on FP Live with Adam Posen, the president of the Peterson Institute for International Economics, a nonpartisan think tank. Subscribers can watch the full discussion on the video box atop this page. What follows is a condensed and edited transcript.

Ravi Agrawal: One area of international economic policy where there seems to be the most difference between the two candidates is migration. How do the two campaigns stack up?

Adam Posen: There absolutely is a meaningful difference in both economic and foreign-policy terms here. The Republican convention, the speech there by Donald Trump, and statements by his campaign have made clear that the goal is to deport an awful lot of currently resident and working migrants in the U.S. They’re looking at roughly 1.3 million deportations as their starting point.

Now, leaving aside the human costs of this—of blended families, of children—which is really important, and just looking at the economics, this is what we call stagflationary, meaning it’s both recessionary and inflationary. You’re depriving the U.S. economy of workers, which leads to shortages, bottlenecks, driven-up prices, overpaying certain workers to get them to fill in these gaps and losses of specific kinds of jobs that native workers generally don’t do, like fruit harvesting, cleaning hotels, back-of-house work in restaurant kitchens, processing in food plants, or residential construction. These are all areas where migrant workers—documented or not—play an enormous role.

The Trump administration has stated repeatedly that they intend to immediately deport some 50,000 people. Then, as they continue deporting, the ripple effects for hiring by small businesses, for business planning, for demand in the economy are very large. Michael Clemens and Warwick McKibbin have done various studies for the Peterson Institute on this. At 1.3 million deported, you are shrinking industrial output by several percentage points because you can’t substitute for it. You’re raising inflation by a couple of percentage points almost immediately. These are big, chunky numbers.

Kamala Harris and her campaign have said repeatedly they’re not looking to do mass deportations. They’re being squirrely. There is a huge amount of room for the president to decide how to enforce border control laws. And clearly, the Biden administration and the would-be Harris administration are not looking to say, “We want as much migration as possible.” As both a human being and as an economist, I wish they would. They’re not. But they are also clearly drawing the line: They’re not going to do mass forced deportations.

If we are that way toward migrants in the U.S., we constrain our growth and our industrial production sharply, and raise inflation. But there’s also direct spillovers on Mexico and Central America. Mexicans will bear the burden of the people being expelled, for the most part. That’s where the Central Americans, who are the bulk of recent undocumented migrants, come through, obviously, to get to the U.S. And this takes place in a context where the U.S., under either Harris or Trump, is going to be renegotiating or threatening Mexico over the USMCA [United States-Mexico-Canada] trade pact. So there’s a lot of pressure on our southern neighbor through this policy that can lead to instability there as well.

RA: Let’s turn to the dollar. So this one is strange. Trump actually wants a much weaker dollar. Adam, what happens if that comes to pass? And how do the candidates differ on this?

AP: It’s strange because while you can complain at any given moment about the valuation of your currency, the strong-dollar policy, which has been in place for more than 30 years, has served the U.S. very well. It reduces the interest rates that our government pays on debt. It increases the purchasing power of both our businesses and our households. It gives us more strength to borrow and to run expansionary policies when we need it like during COVID. It helps the Federal Reserve not have to put up rates quite so often. It’s largely a very good thing. More importantly, when we look at countries like Italy, like Argentina, like the U.K., prior to the 1990s, that tried to help their economies by driving down their currencies, it tended to be unsuccessful.

So again, just to be clear, Harris has not directly affirmed that she wants as strong a dollar as possible, but she has not said anything to suggest she wants a weaker dollar. Importantly, unlike Trump, Harris has said she believes in the independence of the Federal Reserve, that the president should not be prescribing policy. A president can complain about the Federal Reserve or whatever, but they should not be voting on or directing policy at the Fed. And that’s one of the biggest places to shore up the dollar.

Much of what Trump, [former U.S. Trade Representative Robert] Lighthizer, and [Republican vice presidential nominee J.D.] Vance have said actually would strengthen the dollar. So if they put up tariffs, there’s almost a one-to-one correlation that when you put up tariffs your currency rises to offset it. They are going to potentially weaken our commitment to NATO, to Ukraine, to various allies around the world, which makes people scared, and when people are scared, they tend to put money in the U.S. That drives up the dollar. They are potentially doing large tax cuts, which, unless they are net revenue increasing, which they would not be, tend to pump up the economy temporarily and thereby attract more inflows to the dollar. So Trump, Lighthizer, and Vance may all want a weaker dollar. But if they do the things they say they’re going to be doing, then they’re going to have a stronger dollar. And that could lead to some really crazy, destructive policies.

Again, it’s not that Harris has made a big thing of this, but in a sense, that’s the point. She’s allowing the stability of the dollar to be assumed and undisturbed. And Trump is potentially whipsawing the dollar by first doing policies that would drive the dollar up and then having to resort to extreme measures, some of which are destructive, like destroying the independence of the Fed or taxing capital inflows from abroad, to drive the dollar down.

RA: Let’s move to tariffs, an area where there might not be as much divergence between the candidates but there are still differences. The Biden administration didn’t lift the Trump tariffs on China. But on the campaign trail now, Trump has been talking about a whole new level of tariffs if he gets reelected. 

AP: There’s a little more subtlety with tariffs, to be fair to the Trump position. So the first point is to start where you started: Trump put in a lot of tariffs by historical standards in his first term. And Biden chose to keep them on. He had perfect executive authority to remove them. It would have been a way of reducing inflation. He chose not to do that. So looking backward at Trump’s first term and Biden’s term, there’s very little difference on tariffs.

Looking forward, however, there has been a line drawn in the sand, and this started with Biden a few months ago, and Harris has explicitly affirmed it. They view tariffs as a tax, which, frankly, economically is correct. It’s like a sales tax. It gets put on the value when you purchase a product, and the money is taken out of the purchaser’s pocketbook, whether it’s a household or a business importing steel or whatever. They’ve said they will not add across-the-board tariffs, but they’ve said nothing about rolling back tariffs, and they’ve said nothing about being against specific tariffs in general. This is an important distinction, because general tariffs from an inflation point of view and based on how they affect people are worse than, say, a tariff on EVs or on Chinese goods. But tariffs on EVs and Chinese goods still have economic costs. And Harris has not indicated she’ll change that. In fact, on EVs and China, she intends to increase or maintain them.

Trump and his campaign, however, want to raise tariffs not just on China but across the board. What does “across the board” mean? Our best guess is that in practice, they will increase tariffs on all the many imported industrial goods and commodities and agricultural goods that Trump put tariffs on and Biden maintained. So where they already have tariffs, with whatever justification they gave, they will increase those. Now it’s not clear whether that’s going to be 10, 15, or 20 percent. The higher it is, the worse it is. But that’s where they’ll start.

Where it gets subtle is that some observers and some people who speak on behalf of the Trump campaign say this is just a threat. It’s about them negotiating a bilateral deal with individual countries. And they did a little bit of this with Japan and South Korea during their first term. On the one hand, it’s less inflationary because there’ll be holes in the tariffs and there’ll be alternatives. But it’s still reducing purchasing power and increasing uncertainty for businesses. It’s still creating a lot of possible arbitrary imposition of taxes. It’s still distorting people’s choices and limiting their choices. It’s still not good. But to be fair, the overall effect on the economy is lower.

RA: The differences are even less stark on industrial policy. Adam, you wrote a cover essay on this for FP last year, essentially critiquing the Biden administration’s plans. How do you compare the two campaigns now on how they’re thinking about this?

AP: The difference between where the Harris proposals and the Trump proposals are is small. And unfortunately, I think the industrial policy has worked out roughly as I argued. It’s led to a policy of favoring national champions and matching subsidies around the world, which means we spend more to end up in the same competitive place; corruption; and slowing down diffusion of technologies, including green technology. But what is key is that under Biden, with Congress’s support, they passed the CHIPS Act, the Inflation Reduction Act (IRA), various infrastructure acts, and most of these are multiyear programs. But they also made them output-based programs. So it’s putting in money, but then semiconductor producers and EV battery producers will get this additional money depending on how much you produce. So they’re open-ended. What both Harris and Trump are going to do is keep those programs in place. 

I think given the Trump campaign’s proclamations about how they want to use executive authority, they will probably reinterpret some of the specifics of IRA and CHIPS. So they will start giving money to hybrid auto producers, perhaps as well as EV producers, or they will start giving money to various other national security-defined technologies, not narrowly defined chips. The bills as written don’t really allow for that. But there’s a lot of legal writing being done by people associated with the Trump campaign and with the previous Trump administration who more broadly want to say that the executive branch should be able to interpret what Congress does and withhold appropriated funds or redirect appropriated funds.

The Harris industrial policies are more favorable to green transition, whereas the Trump policies are more favorable to extending the lifetime of fossil fuels, internal combustion engines, and so on. And that is a meaningful difference. But it shouldn’t be exaggerated. It’s a much smaller difference than what we’ve talked about on the previous issues. And as existential as the climate issue is, this approach to the climate issue isn’t going to make a huge difference. It’s the distorting, wasteful, slowing down of the international adoption of carbon technologies and slowing down U.S. adoption of green tech that’s bad, from both of them.

RA: Let’s jump to China. It’s striking to me that there were once clear hawks and doves on China in Washington, and now the spectrum has really shifted. It often seems like it’s just a question of how much of a hawk policymakers want to be. What are the differences in China policy that you’re detecting between the two campaigns, inasmuch as it pertains to economics here?

AP: I regret to say, Ravi, I completely agree with you. As economic policy goes, in terms of elected officials and their appointees and their prospective appointees in a Harris or a Trump administration, there is almost no difference. There are differences on issues of human rights. There are some small differences on national security more narrowly defined. But on economics, there’s almost no difference on Capitol Hill, in the administration, in the previous administration, and in the prospective administrations.

What does this mean? It means we’re almost certainly going to get additional punitive tariffs on China, blocking huge amounts of trade. We’re almost assuredly going to have a cut in the American standard of living and in the competitiveness of our newer industries, which will be sacrificed in order to support our old, dying industries, or industries in which we don’t even have a presence. It will have almost no effect on how others interact with China. My colleague at Peterson, Mary Lovely, has documented that throughout Asia over the last few years, as the U.S. has put restrictions on China and Chinese trade and Chinese exports to the U.S., countries in East Asia and Southeast Asia (including our allies) have increased their dependence on Chinese exports and investment. The Biden administration didn’t offer them anything. The Trump administration certainly didn’t offer them anything. If we don’t offer any market access, any investment, then why should they play along with us? So these are very self-defeating policies.

The Chinese Communist Party is awful, and we want to confront them. But by substituting economic barriers for directly confronting and deterring them, others profit at our expense. It may be, sadly, there’s no substitute for direct national security responses to a national security threat.

RA: Let’s try grading the two campaigns. I know you’ll do this only reluctantly, but let’s begin here with Trump’s economic policies. 

AP: I think I would give them a failing grade on macroeconomics, meaning fiscal policy, monetary policy, currency policy, how it all fits together. They fundamentally don’t understand that the economy is more than the sum of individual bilateral government bargains about individual industries and sectors. And this is where you get perverse things, like them advocating things that will drive the dollar up, and then saying we’ll take ridiculous measures to drive the dollar down. And similarly, their repeated mistaking of trade deficits as inherently bad and trade deficits as driven by other countries cheating rather than, as my colleague Maurice Obstfeld just published, driven by factors about capital flows and relative growth rates and U.S. domestic choices. So my big grade for them is, macroeconomically, it’s like they never showed up for class and they read some crank online, and that’s what they’re submitting as their final essay.

RA: What about the Harris team?

AP: On the Harris team, it’s better on macro. At least on the assumption that, as she has indicated, they will largely continue the policies of Biden. On fiscal policy, they’ve been C-minus. They haven’t been disastrous, but they have been looser than they should have been over this period, given the growth in the economy. They’re grounded in reality about currencies and the Fed, and these effects, when you take the economy as a whole, are much better.

But Harris’s team gets the same failing grade as Trump on trade. National Security Advisor Jake Sullivan and USTR [U.S. Trade Representative] Katherine Tai have both said explicitly in major speeches that they completely agree with the Trump administration on their assessment of China when it comes to trade balances and tech competition.

Both the Trump and Biden administrations are wrong. I mean, they’re just flat-out wrong. Trade with China has been beneficial for the U.S., even if it hasn’t benefited a few communities in certain parts of the Midwest. Trade deficits are not a sign of weakness. They’re a sign of capital inflows, of more people wanting to invest in the U.S. than we domestically can fund. And barriers of industrial policy and tariffs backfire because if you think of them in bilateral terms, they cause ripple effects around the world in terms of others retaliating or others feeling they have to self-defend or self-insure, and it reduces income for everybody.

RA: So on that theme, Adam, if you could wave a magic wand and at least get both campaigns to debate their policies on an issue that isn’t being discussed enough, what would that be?

AP: It’s not so much what the campaigns are not discussing enough. It’s that they’re discussing China and industrial policy too much. Congress and both campaigns are obsessed with the economics of China, are obsessed with these notions of technological security. And again, they’re just picking policies that are not fit for purpose. It’s just incredibly frustrating, to be honest, how crazy this has gotten.

If we’re really concerned about national security, create a professional presidential commission at the very start of the administration with a bunch of technical people. Come up with a measure of what is a national security threat in the economic sphere. Base it on availability of sourcing, importance to direct military usage, importance to potential foes, etc. Really publicly state what’s in this list and what’s outside it. This, of course, would automatically get some things wrong, exclude some things it shouldn’t. But in the end, it’s better than what we have now. What Jake Sullivan called “small yard, high fence” was the right principle, but they instead decided on an unknown-sized yard, and an invisible fence. They made it vague—what could be national security and what could not—and deterred a bunch of people in adjacent industries in China and the U.S. from doing anything. And it’s just not effective, and it’s economically harmful.