The midterm elections are getting closer, and the Trump administration’s explanations for rising inflation are getting further from what many voters and independent economists are describing.
Trump’s economic policy advisers have zeroed in on indicators like wages, GDP and stock market growth to sell Americans on a humming economy. Americans are reporting a different experience. In a July Pew Research Center poll, 60% of U.S. adults said that President Donald Trump’s second-term policies have made the economy worse.
The dissonance has reminded former Biden officials of a dynamic they caution can be a losing battle: trying to explain the economy to American voters.
“During the Biden administration, there was a genuine disconnect between improving macroeconomic indicators and how households experience the cumulative increase in their day-to-day prices,” said Tonantzin Carmona, who served as Biden’s special assistant for economic policy on the National Economic Council.
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The economic conditions are different now than when Biden was president. Trump is presiding over a ballooning stock market, while Biden was tasked with jump-starting a sputtering pandemic economy with record-high unemployment. The former president’s policies stoked inflation to highs that Trump hasn’t been able to tamp back down, despite the economic growth driven by the AI industry.
That’s led economists to question the White House’s continued focus on positive indicators that don’t reflect workers’ struggles with high inflation.
After sweeping back into power by castigating President Joe Biden for being out of touch with the average American’s pocketbook, Trump and Republicans are experiencing the other side of their own messaging playbook.
“There is a pretty strong parallel between the way the Biden administration handled the question of inflation,” said William Galston, a senior fellow at the Brookings Institution. “In neither case were the respective administrations in touch with what people were thinking, feeling, experiencing on the ground in their daily lives.”
Trump’s economic agenda has made for a challenging political environment ahead of the midterms.
Treasury Secretary Scott Bessent said a recent Treasury analysis found that if companies passed the total costs of U.S.-Canada tariffs on to consumers, there would be a near-zero effect on inflation. The countries are locked in a trade war, with Canadian Prime Minister Mark Carney rolling out tariffs on $20 billion worth of U.S. goods and Trump outright banning many Canadian imports.
“So the pain to the U.S. — there is none,” Bessent said Tuesday at a Breitbart News event.
The Treasury Department did not respond to multiple requests for the report Bessent cited.
Researchers at the Federal Reserve Bank of Minneapolis found that tariffs contributed 0.2 to 0.4 percentage points to core inflation, which excludes volatile food and energy prices, as of July. Year-over-year core inflation punched in at 3.3% that month.
Economists at the St. Louis Federal Reserve Bank found that tariffs in fact account for a lesser share of inflation in recent months, but that’s likely because soaring energy prices are driving inflation numbers up.
Bessent’s remarks are the latest example of the Trump administration characterizing the economy differently than how people are feeling it. On Tuesday, Bessent touted rising wages, particularly for workers without college degrees and those in the bottom quartile of income earners.
High school-educated workers may be experiencing good times, but on the whole, the nation’s rising wages aren’t keeping up with inflation, meaning workers have less purchasing power than they once did.
“Inflation is a little bit higher than we would like, but — this is important — coming down,” Christopher Phelan, Trump’s chief economic adviser, said Tuesday at the Breitbart event. Inflation increased by 0.4% in August, according to a Bureau of Labor Statistics report released Friday.
Sameera Fazili, the former deputy director of Biden’s National Economic Council, said Bessent’s comments reflect the challenge administration officials face in spinning good news from poor economic conditions.
“When you’re a communicator communicating the policy, you always want to have hard numbers to back the talking point that the political offices are asking you to deliver,” Fazili said. “What voters are upset about is the price level that they are experiencing right now, and instead he is trying to find some talking point on inflation and future price increases.”
Former Biden administration officials say the Trump administration is repeating their mistakes, with a key difference: They argue Trump’s inflation woes are self-inflicted, related to his tariff policies and the Iran war, compared to Biden’s pandemic-era problems.
“The distinction today, though, is that some of the Trump administration policies can themselves add to the affordability pressures people are describing,” Carmona, who’s currently the director of economic policy at the left-leaning Century Foundation, added.
The Iran war has added more than $100 billion in extra costs to Americans’ energy bills as of this week, according to an estimate by Brown University’s Climate Solutions Lab. Soaring energy costs trickle down to production and transit expenses for food, apparel and other necessities, as tariffs also raise prices for certain common goods.
Several Republicans in tight races have criticized Trump’s trade agenda, citing economic concerns. Sen. Susan Collins (R-Maine), who’s in one of the most competitive races of the midterm cycle, has come out against the president’s trade war with Canada. So has John Sununu, the Republican Senate contender in New Hampshire, as The Washington Sun previously reported.
Democratic Senate candidates in Michigan, Ohio and Alaska, looking to retake the Senate majority, have hammered their Republican opponents on trade.
“Consumer confidence is lower than it has ever been. That means it’s lower than when we had 9% inflation in 2022,” said Neera Tanden, who served as Biden’s domestic policy adviser. “I think that is a product of the fact that costs and wages are out of whack for basically the bottom 60 to 70% of workers.”
“The greatest irony to me is there is no president that I’m aware of who has adopted a series of policies that raise costs and create additional burdens for working-class people,” added Tanden, who is currently the president and CEO of the left-leaning Center for American Progress.
The president himself has acknowledged that his policies have created price pressures but has argued that the temporary economic pain is worth it to achieve bigger goals, such as eliminating a nuclear threat from Iran or reshoring American manufacturing.
“Guys come up, ‘You know, I wish you didn’t do the war in Iran. Gasoline’s up,’” Trump said in his speech at the Republican midterm convention on Wednesday. “And I say ... let me ask you one question: Can Iran have a nuclear weapon? ‘Absolutely not.’ Well then, I’m right, then I win.”
White House spokesperson Kush Desai defended the impact of Trump’s policies on the economy in a statement to The Washington Sun.
“Last year, President Trump increased America’s average tariff rate by nearly sevenfold yet inflation cooled,” Desai said. “While President Trump had always been clear about temporary disruptions as a result of Operation Epic Fury, the August CPI report showing dramatic month-over-month declines in beef, prescription drug, and auto insurance costs is proof that the Administration’s policies continue to deliver long-term economic relief for the American people.”
“That’s the argument you make when you’ve run out of economic arguments,” said Lindsay Owens, the president and CEO of the left-leaning Groundwork Collaborative. “You saber-rattle about foreign adversaries, and you wax poetic about a bygone period of American manufacturing.”
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