Trump, just like Biden - Americans continue to face high prices
President Donald Trump was elected on a promise to reduce consumer prices, which rose sharply under Joe Biden, but now he faces the same challenge that plagued his predecessor: prices, once they rise, rarely come back down. Trump is also being criticized for repeating some of Biden's mistakes, including underestimating the impact of high prices on households and relying on corporate investment to create jobs and raise wages, a strategy that takes years to bear fruit.
In his recent statements, Trump has announced “trillions of dollars in new investment” that he says will create jobs. He has also insisted that inflation is under control, relying largely on low gas prices as evidence. But many economists say that approach is flawed. Both Biden and Trump, they say, ignore a political truth: Americans are more concerned about the fact that prices have risen, regardless of the current pace of inflation.
Inflation has fallen sharply, now around 3%, compared with over 9% at its peak during Biden’s term. However, goods, especially those affected by Trump’s tariffs, are more expensive than before. Wages have increased, but not enough to offset the increase. Food prices are rising again: beef is about 15% more expensive, bananas 7%, coffee over 20%. Even construction tools and equipment, mostly imported, are 6.2% more expensive than a year ago, while cleaning products are 5.5% more expensive.
This has caused widespread discontent and has significantly lowered the rating of Trump's performance on the economy. According to a Reuters/Ipsos poll, public approval has fallen to 38%, the lowest level since he returned to power. Other indices of economic perception have also deteriorated. Regardless of political affiliation, Americans of all groups feel pessimistic.
Even the traditional Thanksgiving dinner illustrates this problem. The American Federation of Agriculture estimates that the dinner will cost 5% less than last year, thanks to steep declines in the price of turkey, but the figure is still 13% more expensive than in 2019, before the pandemic. Half of the other products on the table are more expensive than last year.
In an effort to quell the anger, Trump announced the removal of tariffs on hundreds of food products, including coffee and bananas. He also proposed distributing $2,000 checks to low- and middle-income families, funded by tariff revenue.
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