President Trump’s issue with fixing the high cost of living may be giving voters a sense of deja vu.
Like his predecessors, Trump is trying to sell the country on his plan to create factory jobs. The Republican, like Democratic President Biden, has said he wants to lower the cost of prescription drugs. Both tried to shame companies by raising prices.
Trump is even leaning into a message that echoes Biden’s 2021 assertion that high inflation is a “temporary” problem that will soon disappear.
“We’re going to hit 1.5% very soon,” President Trump told reporters Monday. “Everything is down.”
President Trump continues to say that an economic boom is just around the corner, but there are signs that he is already running out of voters’ patience as his campaign promise to quickly correct inflation remains unfulfilled.
voter dissatisfaction
Voters in this month’s election tilted strongly toward Democrats due to affordability concerns. For this reason, President Trump has dismissed weak economic polling as a floating, bogus idea designed to ease fiscal pressure.
He has promised a $2,000 rebate on tariffs and said he may offer a 50-year mortgage, 20 years longer than currently available mortgages, to reduce monthly payments. On Friday, President Trump lifted tariffs on beef, coffee, tea, fruit juices, cocoa, spices, bananas, oranges, tomatoes and certain fertilizers, acknowledging that “in some cases” they may be contributing to higher prices.
However, these are largely “copyright” moves and are unlikely to move inflation significantly, said Bharat Ramamurti, a former deputy director of the Biden administration’s National Economic Council.
“They are in a very tough position because they have a well-established reputation for not taking costs into account and the tools available to them are unlikely to be able to help people in the short term,” Ramamurti said.
Ramamurti said the Biden administration has learned the hard way that voters won’t be appeased by claims that the president’s policies will ultimately lead to higher incomes.
“That argument doesn’t resonate,” he said. “Please take it from me.”
Biden talks about inflation
Biden will inherit an economy still recovering from the emergency caused by the coronavirus pandemic, which shuttered schools and offices, led to mass layoffs and historic levels of government borrowing. In March 2021, he signed a $1.9 trillion relief package. Critics said it was excessive and could cause price increases.
As the economy reopened, there were shortages of computer chips, kitchen appliances, cars, and even furniture. Cargo ships were stranded waiting to enter port, causing supply chain problems. Russia’s invasion of Ukraine in early 2022 increased the cost of energy and food, and consumer prices reached a 40-year high in June of the same year. The Federal Reserve has raised its benchmark interest rate to control inflation.
Mr. Biden tried to convince Americans that the economy was strong. “Bidenomics is working,” he said in his 2023 speech. “The United States is now leading the global economy with the highest economic growth rate since the pandemic.”
His claims did little to sway voters, although many economic indicators compared to those of other countries at the time generally supported his claims. As of August 2023, only 36% of American adults supported his economic response, according to a poll at the time by The Associated Press-NORC Center for Public Affairs Research.
President Trump talks about inflation
Republicans argued that Biden’s policies worsened inflation. Democrats are using the same framework against Trump today.
Their argument is this: President Trump’s tariffs are being passed on to consumers in the form of higher prices. The cancellation of his clean energy projects means fewer new sources of electricity due to rising utility costs. His mass deportation increased the cost of housing construction in the immigrant-heavy construction sector.
Former Biden administration officials say Trump took office in January with strong economic growth, a solid job market and inflation near historic levels, but he was the only one to reverse those trends.
“It’s amazing how many Americans are aware of his trade policies and rightly blame them for the upturn in prices,” said Gene Sperling, a senior Biden adviser who also served as chairman of the National Economic Council in the Obama and Clinton administrations.
“He’s put himself in a tough trap, and it’s unlikely to get any easier,” Sperling said.
Consumer prices were rising at an annual rate of 2.3% in April, when President Trump imposed tariffs, but that rate accelerated to 3% in September.
So far, the political fallout appears to be similar, although the spike in inflation has been less than what voters endured under the Biden administration. According to the survey, 67% of American adults disapprove of President Trump’s performance.
“In both cases, the president caused a significant portion of the inflation,” said Michael Strain, director of economic policy research at the center-right think tank American Enterprise Institute. “President Biden did not take this concern seriously enough in his first months in office, and I don’t think President Trump is taking this concern seriously enough at this point.”
Strain noted that both presidents have even responded to the challenge in “strangely and eerily similar ways,” downplaying inflation as a problem, pointing to other economic indicators, and attempting to address concerns by issuing government checks.
white house strategy
Trump administration officials have argued that a combination of income tax cuts, a foreign investment framework tied to tariffs, and changes in regulatory enforcement will lead to more factories and jobs. All of this, they say, could increase the supply of goods and services and reduce the forces that drive inflation.
“The policies we’re pursuing right now are increasing supply,” Kevin Hassett, director of the Trump administration’s National Economic Council, told the Economic Club of Washington on Wednesday.
The Fed has lowered its benchmark interest rate, which could increase the supply of investment money in the economy. But the central bank took this step because of a weakening job market, even though inflation is above its 2% target, and there are concerns that a rate cut of the size President Trump wants could further accelerate inflation.
Time may not be on Trump’s side
According to research by Ryan Cummings, an economist who served on the Biden administration’s Council of Economic Advisers, it takes time for consumer sentiment to improve after inflation declines.
His view on the University of Michigan’s Consumer Sentiment Index is that the impact of higher inflation post-pandemic is no longer a driving factor. Voters have been frustrated in recent days because President Trump has led them to believe he could lower food prices and other spending, but he hasn’t been able to do so.
“When it comes to structural affordability issues like housing, child care, education, and health care, President Trump has been moving in the wrong direction on each of those fronts,” said Cummings, now chief of staff at the Stanford Economic Policy Institute.
Trump’s best chance to overcome inflation right now, he said, may be “if we get a very lucky break in commodity prices” through good global harvests and continued oil production that outstrips demand.
For now, Trump has decided to continue relying on attacking Biden when things go wrong with the economy, as he did last week in an interview with Fox News’ “The Ingraham Angle.”
“The problem is that Biden did this,” Trump said.
Bork writes for The Associated Press.
