Donald Trump. Keystone
Trump has not only failed to deliver on the economic promises he made during the 2024 campaign. He also continues to repeat the same mistake as President Joe Biden.
By insisting that the U.S. economy has never been in better shape, despite sky-high fuel prices and a growing affordability crisis, he demonstrates a complete lack of understanding—both of the economy and of his own ineffectiveness.
Worse still, when challenged, he becomes dismissive, expressing indifference to voters’ hardships.
Let’s examine what the latest data says about inflation, which is the primary economic concern for the public.
During the campaign, Trump promised not only to lower inflation (the rate of price increases) but also to lower price levels (how much things actually cost).
But since wage growth is not keeping pace with inflation, he has clearly failed to address this pressing issue. By Election Day, the average American worker will be worse off than at the start of Trump’s second term. The average price level will be at least 7% higher than when Trump returned to the White House, and the inflation rate will accelerate to nearly 4%.
Meanwhile, voters will remember that the war with Iran led to a 50% increase in gas prices (averaging around $4.50 per gallon).
Voters may also recall that Trump’s “One Big Beautiful Bill” made health insurance less affordable for approximately 20 million households and contributed to keeping mortgage rates high, making homeownership unaffordable for far too many Americans.
It’s not Trump’s fault, it’s not Trump’s fault
It goes without saying that Trump will try to shift the blame for inflation away from himself.
But that won’t be easy. Aside from die-hard MAGA supporters, everyone knows that Trump bears direct responsibility for the problem of affordability. By aggressively raising import tariffs and carrying out mass deportations, he single-handedly caused prices to rise for both imported goods and many domestically produced goods and services.
Similarly, by launching a war of his own choosing against Iran, he has caused a sharp rise in the prices of gasoline, diesel fuel, and fertilizer. These costs are sure to put him at a disadvantage even with his rural base, which has also suffered from reduced orders for agricultural products from China.
It goes without saying that Trump has failed to usher the economy into the “golden age” he promised in his second inaugural address.
Last year, despite a strong tailwind in the form of a boom in AI investment, the overall economic growth rate (2.1%) was lower than the average (2.7%) recorded over the past three years (the post-pandemic period) under the Biden administration.
And, by all accounts, the economy slowed significantly in the first half of this year due to the energy price shock caused by the war with Iran.
Given the deteriorating indicators, it will be even harder for Trump to divert attention from his chaotic and counterproductive economic policies. Since the day he returned to office, the economy has been mired in uncertainty, which is holding back investment almost everywhere, with the exception of the AI sector.
Tariffs were not a panacea
One of Trump’s key goals was to eliminate the U.S. trade deficit and create manufacturing jobs through an aggressive tariff policy, under which import duties were raised to their highest level in a century.
However, on this issue as well, he will have little to show voters as a result of his efforts. The trade deficit last year remained virtually unchanged compared to 2024, and employment in the manufacturing sector continues to decline.
Moreover, most voters recognize that the tariffs imposed by Trump are the main cause of inflation.
The only argument Trump currently has for investors is the booming stock market, which continues to set new records—a trend that apparently reflects hopes that AI will revolutionize productivity.
But this “victory” is unlikely to resonate with the vast majority of voters, who consider the affordability of goods and services to be the most important issue, especially if they learn about Trump’s own stock trading.
Nor can we rule out the possibility that a war with Iran and rising U.S. Treasury yields could trigger a (long-overdue) stock market correction before the midterm elections.
Those who live by the sword die by the sword. Trump won in 2024 by constantly criticizing the Biden administration’s dismal inflation figures.
If the Republicans do indeed suffer a crushing defeat in November, it will be because he has made things even worse for Americans. His shameless enrichment of himself and his extended clan only adds insult to injury.
Desmond Lachman
Desmond Lachman, a senior fellow at the American Enterprise Institute, is a former deputy director of the International Monetary Fund’s Policy Development and Review Department and a former chief economic strategist for emerging markets at Salomon Smith Barney.
© Project Syndicate, 2026.
www.project-syndicate.org
