How will Trump’s economic policies impact Hawaii? An economist weighs in

HONOLULU (HawaiiNewsNow) – One of Hawaii’s top economists is predicting President-elect Donald Trump’s tax, immigrations and tariff proposals will harm Hawaii’s economy.
But one of Trump’s leading supporters in the islands said Hawaii workers will still benefit.
Many people who voted for the former president say it was because their families were harmed by rising prices and high interest rates, but Professor Carl Bonham, executive director of the University of Hawaii Economic Research Organization, says the things Trump is promising will make both of those problems worse.
“If tariffs come into play late in 2025 or 2026 and start to raise prices for consumers and businesses across the across the board, then everybody’s purchasing power is diminished,” he said. “And that’s a net drag as well. So there are significant implications for the Hawaii economy.”
The stock market has boomed since Trump’s election. That might be good for Hawaii residents’ investments and 401(k)s, but Bonham said the stock boom is due to expected continuation of existing and new corporate tax cuts.
Meanwhile, Bonham said, the heating of the economy will also keep inflation and interest rates high.
“The higher inflation and the slowing down on interest rate cuts will have a direct impact on Hawaii, also acts to raise the value of the dollar and weakens the ability of international visitors to spend. So those are … the most likely things that we would start to see happening in 2025,” he said.
But Shirlene Ostrov, chair of the Trump campaign in Hawaii, pointed to targeted tax cuts that, if enacted, could benefit Hawaii’s service workers.
“Some of those things that are directly going to affect our people, especially here in Hawaii, the kupuna on Social Security, our overtime workers and our and our tips is for our hospitality is going to be a huge boon to our local families here,” Ostrov said.
But Bonham predicts fiscal conservatives in Congress, facing rising deficits and debt due to other tax cuts and high borrowing rates, will resist eliminating taxes on tips, overtime or social security.
He also said severe crackdowns on immigration, which could reduce both authorized and unauthorized migration, will also impact Hawaii, which has been challenged by residents leaving the state for less expensive locations.
“The only way to have labor force growth and to have or even stability is through migration,” he said. “So, anything you do to make that harder is a drag on our economy.”
Ostrov agrees it’s unclear how Trump’s program will actually take shape, but overall feels the Republicans will do what’s right for Hawaii.
“I think the narrative that that the Republicans are for only big corporations runs afoul with our policies and the people we are reaching, when in fact, maybe the other party might be the party of the elite,” she said.
“The American people want change. I believe Donald Trump will lead that change and the people that are surrounding him,” she said. “So, I’m excited. I’m excited for Hawaii.”

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