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The central theme of the current messaging campaign is affordability, a focal point that has gained prominence following recent elections. Inflation has surfaced as a significant weakness for Trump and the Republicans, with voters overwhelmingly identifying the economy as their primary concern during Tuesday’s elections.
Democrats capitalized on these affordability issues, achieving substantial victories in the gubernatorial races in New Jersey and Virginia. This shift turned what was once a strong suit for Trump in the 2024 presidential race into a potential liability as the midterm elections approach next year.
White House insiders, speaking anonymously to avoid preempting the president’s official stance, emphasized that affordability has consistently been a key concern for Trump. They noted that the president intends to increase his focus on this issue, as evidenced by his recent announcement that pharmaceutical companies Eli Lilly and Novo Nordisk will lower the prices of their anti-obesity medications.
“We have been the ones effectively addressing affordability, not the Democrats,” Trump asserted during an Oval Office event where he unveiled the agreement.
“We are the ones that have done a great job on affordability, not the Democrats,” Trump said at an event in the Oval Office to announce the deal.
“We just lost an election, they said, based on affordability. It’s a con job by the Democrats.”
The White House is keeping up a steady drumbeat of posts on social media about prices and deals for Thanksgiving dinner staples at retailers such as Walmart, Lidl, Aldi and Target.
“I don’t want to hear about the affordability, because right now, we’re much less,” Trump told reporters on Thursday, arguing that things are much better for Americans with his party in charge.
“The only problem is the Republicans don’t talk about it,” he said.
The outlook for inflation is unclear
As of now, the inflation outlook has worsened under Trump. Consumer prices in September increased at an annual rate of 3 per cent, up from 2.3 per cent in April, when the president first began to roll out substantial tariff hikes that suddenly burdened the economy with uncertainty.
The AP Voter Poll showed the economy was the leading issue in Tuesday’s elections in New Jersey, Virginia, New York City and California.
Grocery prices continue to climb, and recently, electricity bills have emerged as a new worry. At the same time, the pace of job gains has slowed, plunging 23 per cent from the pace a year ago.
The White House maintains a list of talking points about the economy, noting that the stock market has hit record highs multiple times and that the president is attracting foreign investment.
Trump has emphasised that petrol prices are coming down, and maintained that petrol averaging $US2 a gallon (82 cents per litre), but AAA reported Thursday that the national average was $US3.08 ($1.26 per litre), about two cents lower than a year ago.
“Americans are paying less for essentials like gas and eggs, and today the Administration inked yet another drug pricing deal to deliver unprecedented health care savings for everyday Americans,” said White House spokesman Kush Desai.
Trump gets briefed about the economy by Treasury Secretary Scott Bessent and other officials at least once a week and there are often daily discussions on tariffs, a senior White House official said, noting Trump is expected to do more domestic travel next year to make his case that he’s fixing affordability.
But critics say it will be hard for Trump to turn around public perceptions on affordability.
“He’s in real trouble and I think it’s bigger than just cost of living,” said Lindsay Owens, executive director of Groundwork Collaborative, a liberal economic advocacy group.
Owens noted that Trump has “lost his strength” as voters are increasingly doubtful about Trump’s economic leadership compared to Democrats, adding that the president doesn’t have the time to turn around public perceptions of him as he continues to pursue broad tariffs.
New hype about income tax cuts ahead of April
There will be new policies rolled out on affordability, a person familiar with the White House thinking said, declining to comment on what those would be. Trump on Thursday indicated there will be more deals coming on drug prices. Two other White House officials said messaging would change — but not policy.
A big part of the administration’s response on affordability will be educating people ahead of tax season about the role of Trump’s income tax cuts in any refunds they receive in April, the person familiar with planning said. Those cuts were part of the sprawling bill Republicans muscled through Congress in July.
This individual stressed that the key challenge is bringing prices down while simultaneously having wages increase, so that people can feel and see any progress.
There’s also a bet that the economy will be in a healthier place in six months. With Federal Reserve Chair Jerome Powell’s term ending in May, the White House anticipates the start of consistent cuts to the Fed’s benchmark interest rate. They expect inflation rates to cool and declines in the federal budget deficit to boost sentiment in the financial markets.
But the US economy seldom cooperates with a president’s intentions, a lesson learned most recently by Trump’s predecessor, Democrat Joe Biden, who saw his popularity slump after inflation spiked to a four-decade high in June 2022.
The Trump administration maintains it’s simply working through an inflation challenge inherited from Biden, but new economic research indicates Trump has created his own inflation challenge through tariffs.
Since April, Harvard University economist Alberto Cavallo and his colleagues, Northwestern University’s Paola Llama and Universidad de San Andres’ Franco Vazquez, have been tracking the impact of the import taxes on consumer prices.
In an October paper, the economists found that the inflation rate would have been drastically lower at 2.2 per cent, had it not been for Trump’s tariffs.
The administration maintains that tariffs have not contributed to inflation. They plan to make the case that the import taxes are helping the economy and dismiss criticisms of the import taxes as contributing to inflation as Democratic talking points.
The fate of Trump’s country-by-country tariffs is currently being decided by the Supreme Court, where justices at a Wednesday hearing seemed dubious over the administration’s claims that tariffs were essentially regulations and could be levied by a president without congressional approval.
Trump has maintained at times that foreign countries pay the tariffs and not US citizens, a claim he backed away from slightly on Thursday.
“They might be paying something,” he said. “But when you take the overall impact, the Americans are gaining tremendously.”