In 2024, American voters will send Trump and the Republican Party to the White House due to economic problems. However, by November 2026, voters will feel more pessimistic about the economy than two years ago. Although the overall U.S. economy is performing well, the resurgent high inflation and soaring cost of living have become the main reasons for the Republican Party's heavy setback in the March 3 midterm elections.
CNN reported that on the surface, the U.S. economy is in strong shape: the unemployment rate is extremely low and has reached what economists consider "full employment"; consumer spending that supports the foundation of the U.S. economy is resilient, and the artificial intelligence (AI) revolution is driving the largest spending boom in modern U.S. history.
Yet voters blame their financial anxieties squarely on Trump's signature policies, including tariffs, lax AI regulations, strict immigration restrictions and, most notably, the ongoing war with Iran. Heather Long, chief economist at Navy Federal Credit Union, said bluntly: "Had it not been for a war with Iran, the results of this midterm election would have been completely different."
The war in Iran became a critical watershed that changed the election situation. The war caused oil prices to reach a four-year high, diesel prices broke historical records, and gasoline prices across the United States reached their highest point in history on Election Day. According to research by Brown University, since the war began, high oil prices have increased the expenses of the average American household by US$1,150. This has not only pushed up bond yields, but also caused mortgage interest rates to soar at the fastest rate in three years, causing average real wages to shrink after Trump returned to the White House.
In addition to oil prices, voters also pointed the finger at other policies of Trump and the Republican Party for the soaring cost of living:
Health care premiums soar: Because Republicans did not extend the Affordable Care Act (ACA)'s increased subsidies, the average monthly premium for "Obamacare" soared 58% this year.
AI drives electricity prices up: Trump strongly supports the unrestricted development of AI, causing electricity costs to jump 8.7% during his second term.
Maintenance and construction costs have increased significantly: Strict immigration policies and tariffs have caused car repair costs to soar by 12.3% and house construction costs to increase by 13.3%.
Tariffs are passed on to the entire population: According to estimates from the Tax Foundation, Trump's tariff policies will impose an average additional tax burden of $820 on each family this year.
This is in sharp contrast to Trump's first term, when wage growth far exceeded inflation. According to a CNN poll conducted in October this year, Trump's net approval rating on economic handling has collapsed to minus 46 percentage points, even lower than the minus 31 percentage points on the eve of former President Biden's withdrawal from the election.
Steven Durlauf, an economist at the University of Chicago, said that even assuming that the previous government messed up the economy, Trump cannot be excused; inflation has been seriously mismanaged, and voters will inevitably blame the policies of the current government. In this "K-shaped economy", the wealthy class who hold stocks and real estate are not affected, but the lower-class workers are reduced to paycheck to paycheck. The dream of the middle class becomes increasingly distant, becoming the core driving force for voters to fight back with their votes.
