When Donald J. Trump assumed the presidency in 2017, prices had increased by approximately 5% over the previous four years. Should he secure a victory in the 2024 White House race, he would be taking office amid a 20% and rising price surge, presenting a markedly different economic environment for the policies he advocates, such as tariffs and tax cuts.
Trump often attributes the recent surge in prices to the Biden administration; however, inflation has been a global issue since the onset of the COVID-19 pandemic in 2020. Disruptions in the supply chain, changes in consumer spending habits, and other pandemic-related factors collided with stimulus-driven demand, propelling costs upwards.
The prolonged period of heightened inflation has brought significant changes to the nation’s economic landscape. Businesses have become more adept at adjusting prices, and consumers have grown accustomed to these fluctuations, unlike the pre-pandemic era when costs remained stable for decades. Moreover, the Federal Reserve has raised interest rates to 5.3% in an effort to curb demand and manage the situation.
This combination of inflationary concerns and elevated interest rates could render many of Trump’s proposed policies more risky or expensive, particularly with the economy operating at full throttle and unemployment at record lows. Trump’s proposals for tax cuts could potentially accelerate economic growth but also widen the deficit, potentially fueling inflation and increasing the national debt at a time when government borrowing costs are high. His stance on mass deportations, at a time when economists warn of labor shortages that could drive up prices, poses additional risks. Furthermore, his pledge to escalate tariffs, particularly on China, may lead to a significant spike in import prices.
