Voters voiced frustration over inflation. Some economists expect Trump's policies to worsen it.
Voters swept President-elect Donald Trump back into office on what appears to be a swell of discontent over the state of the U.S. economy.
More than two-thirds of voters say the economy is in bad shape, according to the preliminary results of an ABC News exit poll. Forty-five percent of voters say their own financial situation is worse now than it was four years ago, which exceeds the share who held that view in the immediate wake of the Great Recession in 2008, the poll found.
Yet despite their frustrations about the cost of living, voters elected a candidate whose economic policies are widely expected to worsen inflation and hammer household budgets, experts told ABC News.
Trump’s proposals of heightened tariffs and the mass deportation of undocumented immigrants could raise prices for everything from coffee to bananas to smartphones, experts said.
“People are obviously unhappy with inflation. Trump’s policies aren’t a remedy – they will feed the fire,” Robert Lawrence, a professor of trade and investment at Harvard University's Kennedy School of Government, told ABC News.
On the campaign trail, Trump promised a sharp escalation of the tariffs enacted during his first term. He has proposed tariffs of between 60% and 100% on Chinese goods, and a tax of between 10% and 20% on every product imported from all U.S. trading partners.
Economists widely expect that tariffs of this magnitude would increase prices paid by U.S. shoppers, since importers typically pass along the cost of those higher taxes to consumers. Trump's tariffs would cost the typical U.S. household about $2,600 per year, according to an estimate from the Peterson Institute for International Economics.
“We import a lot of things that we don’t impose tariffs on,” Douglas Irwin, a professor of economics at Dartmouth College who specializes in the history of U.S. trade policy, told ABC News. “This is a price impact that consumers will feel when they have their morning coffee.”
Trump has also vowed to carry out the largest deportation of undocumented immigrants in U.S. history, which potentially could mean the removal of millions of members of the nation’s workforce.
Since the unemployment rate currently stands at a historically low level, such a policy would cause a worker shortage, forcing employers to raise pay for remaining workers and pass along that added cost in the form of higher prices for consumers, experts said.
“As you take out workers and have worker shortages, you’d expect prices to go up significantly,” Kara Reynolds, an economist at American University, told ABC News.
Inflation has cooled dramatically from a peak of about 9% in 2022, now hovering near the Federal Reserve’s target rate of 2%. Even so, that progress hasn't reversed a leap in prices that dates back to the pandemic. Since President Joe Biden took office in 2021, consumer prices have skyrocketed more than 20%.
“Americans are looking at grocery bills that are still 20% higher,” Reynolds said. “They’re still feeling that pain in their pocketbooks.”
During the campaign, Trump frequently rebuked concerns about potential price increases resulting from his proposals by pointing to the low rate of inflation that coincided with tariff policies enacted during his first term in office.
“I had tariffs, and yet I had no inflation,” Trump said at the presidential debate with Vice President Kamala Harris in September. “We have inflation like very few people have ever seen before.”
The Trump campaign did not immediately respond to an ABC News request for comment regarding concerns about his economic proposals.
Experts who spoke to ABC News acknowledged that inflation stood at a relatively low level during Trump’s first term, but they also pointed to evidence of some tariff-related price increases and noted his plans for an escalation.
Tariffs placed on washing machines in 2018, for example, raised the price of these appliances by 12%, according to an April 2019 working paper co-authored by a member of the Federal Reserve Board of Governors and researchers at the University of Chicago.
“We didn’t have mass deportations during Trump’s first term, and the tariffs we saw were selective,” Irwin said. “In other words, the scope of tariff increases this time would be much more extensive, and there would be a much more pronounced price impact than before.”
Still, Irwin added, it remains unclear whether the tariff proposals will include some exemptions that could ease the impact.
“There’s a lot of uncertainty because we don’t know if all of the imports or some of the imports will be hit by tariffs,” Irwin said.
