President Donald Trump’s problems with fixing the high cost of living might be giving voters a feeling of déjà vu.
Similar to his predecessor, Trump is attempting to persuade the nation regarding his initiatives for generating factory employment. The Republican aims to reduce the expense of prescription medications, a goal also pursued by Democratic President Joe Biden. Both individuals sought to admonish corporations for their price hikes.
Trump is also leaning on a message echoing Biden's 2021 assertions that the surge in inflation is merely a “transitory” issue that will quickly disappear.
“We’re going to be hitting 1.5% pretty soon,” Trump told reporters Monday. ”It’s all coming down.”
Despite Trump's continued assertions of an impending economic surge, indicators suggest voters' patience has waned, particularly as his campaign promises promises to swiftly resolve inflation remain unfulfilled.
Voters are growing frustrated with Trump on inflation
Democrats saw a significant surge in support during this month's elections compared to concerns about affordability. Consequently, Trump, who disregards his unfavorable economic poll numbers as fabricated, is contemplating unformed concepts to alleviate financial strains.
He's pledging a $2,000 rebate on his tariffs and indicated he might extend the 30-year mortgage to 50 years to lower the amount of his monthly payments. On Friday, Trump scrapped his tariffs on items like beef, coffee, tea, fruit juice, cocoa, spices, bananas, oranges, tomatoes, and specific fertilizers, stating they “may, in some cases” have driven up prices.
But those are largely “gimmicky” moves unlikely to move the needle much on inflation, said Bharat Ramamurti, a former deputy director of Biden’s National Economic Council.
“They’re in this very tough position where they’ve developed a reputation for not caring enough about costs, where the tools they have available to them are unlikely to be able to help people in the short term,” Ramamurti said.
Ramamurti stated that the Biden administration discovered through experience that voters aren't satisfied when a president claims his policies will eventually boost their earnings.
“That argument does not resonate,” he said. “Take it from me.”
How inflation hit Biden’s presidency
Biden inherited an economy trying to rebound from the coronavirus pandemic, which had shut down schools and offices, causing mass layoffs and historic levels of government borrowing. In March 2021, he signed into law a $1.9 trillion relief package. Critics said that was excessive and could cause prices to rise.
With the economy's reopening, shortages emerged for computer chips, kitchen appliances, automobiles, and even furniture. Container ships faced delays in docking at ports, leading to supply chain issues. Russia's incursion into Ukraine at the start of 2022 pushed up energy and food costs, and consumer prices hit a forty-year peak that June. To curb inflation, the Federal Reserve increased its key interest rates.
Biden tried to convince Americans that the economy was strong. “Bidenomics is working,” Biden said in a 2023 speech. “Today, the U.S. Has had the highest economic growth rate, leading the world economies since the pandemic.”
Voters remained unconvinced by his arguments, with a poll from The Associated Press-NORC Center for Public Affairs Research in August 2023 indicating that only 36% of U.S. Adults approved of his economic management.
Trump might be his own worst enemy on inflation
Republicans contended that Biden's policies exacerbated inflation. Democrats are now employing that identical approach against Trump.
The argument presented is that Trump's tariffs result in increased consumer prices, his termination of clean energy initiatives will lead to a scarcity of new electricity generation as utility costs rise, and his widespread deportations have escalated the expense of building homes within the construction industry, which relies heavily on immigrant labor.
Officials from The Biden administration point out that Trump inherited a robust economy with significant job growth and inflation nearing historical lows, only to then reverse these positive trends.
“It’s striking how many Americans are aware of his trade policy and rightly blame the turnaround in prices on that erratic policy,” said Gene Sperling, a senior Biden adviser who also led the National Economic Council in the Obama and Clinton administrations.
“He is in a tough trap of his own doing — and it’s not likely to get easier,” Sperling said.
Consumer prices had been increasing at an annual rate of 2.3% in April when Trump launched his tariffs, and that rate accelerated to 3% in September.
While the current inflation spike hasn't reached the levels voters experienced during Biden's term, the political repercussions seem comparable: 67% of U.S. Adults disapprove regarding Trump's track record, as reported by November polling data from AP-NORC.
“In both instances, the president caused a non-trivial share of the inflation,” said Michael Strain, director of economic policy studies at the American Enterprise Institute, a center-right think tank. “I think President Biden didn’t take this concern seriously enough in his first few months in office and President Trump isn’t taking this concern seriously enough right now.”
Strain observed that the two leaders have addressed the predicament in “weirdly, eerily similar ways” by minimizing inflation's significance, highlighting alternative economic metrics, and intending to alleviate worries through government disbursements.
White House bets its policies can tame inflation
Trump's administration has argued that their combination of reduced income taxes, international investment structures linked to tariffs, and altered regulatory enforcement will result in more manufacturing facilities and employment opportunities. They contend that these measures could boost the availability of products and services, thereby lessening the factors that contribute to inflation.
“The policies that we’re pursuing right now are increasing supply,” Kevin Hassett, director of Trump’s National Economic Council, told the Economic Club of Washington on Wednesday.
The Federal Reserve has lowered its key interest rates, potentially boosting the economy's money supply for investment purposes. However, this action by the central bank stems from a deteriorating job market, even as inflation surpasses its 2% objective. Consequently, there's apprehension that the magnitude of rate reductions advocated by Trump might exacerbate inflationary pressures.
Time might not be on Trump’s side
Consumer attitudes tend to lag behind a decrease in inflation, as noted by Economist Ryan Cummings, who previously served on Biden’s Council of Economic Advisers.
He interprets the University of Michigan's consumer sentiment index as indicating that the impact of the post-pandemic inflation surge is no longer a primary influence. Currently, voters are expressing dissatisfaction because Trump had led them to expect he could reduce the cost of groceries and other necessities, a promise he hasn't fulfilled.
“When it comes to structural affordability issues — housing, child care, education, and health care — Trump has pushed in the wrong direction in each one,” said Cummings, who is now chief of staff at the Stanford Institute for Economic Policy Research.
He said Trump’s best chance of beating inflation now might be “if he gets a very lucky break on commodity prices” through a bumper harvest worldwide and oil production continuing to run ahead of demand.
Currently, Trump is opting to persist in blaming Biden for any economic downturns, a strategy he employed during a Monday interview with Fox News’ “The Ingraham Angle.”
“The problem was that Biden did this,” Trump said.