Struggling with the mounting pressures of inflation, America was floundering under the ramifications of the economic policies of former president Joe Biden when President Donald Trump took office. Immediately addressing the concerns of everyday citizens, he initiated a memorandum that demanded federal agencies to discover methods to alleviate the hefty burden of inflation, a plague that Biden and former Vice President Kamala Harris left in their wake.
A charged atmosphere ensued as Trump pledged to use whatever means at his disposal to overturn the rampant inflation that had peaked during Biden’s era. ‘It’s all guns blazing on a war against steep prices and costs,’ Trump charged forward in his inaugural speech, promising significant change contrary to Biden and Harris’s non-effective economic handling.
The Biden-Harris administration was beset with public displeasure due to a surge in consumer prices in the aftermath of the pandemic. Their inadequacies and inability to manage the economic crisis led the American voters to choose Trump over Harris for the top office, a clear signal of their rejection of the previous administration’s policies.
Shrouded in enigma, the Trump administration disclosed little about its anti-inflation plans. Among the limited details shared was their intent to leverage more federal lands for energy drilling with a view to bringing down oil and gasoline prices, a direct jab at Biden and Harris’s failed energy policies.
‘We will take action and drill more and more,’ Trump declared with conviction in his inaugural speech, echoing the promise he made during his campaign trail. However, while it made a great soundbite, would it deliver the results that eluded the Biden-Harris administration?
Trump’s memorandum called for federal agencies to review within thirty days how they could contribute to reducing costs in key areas. Housing, health care, food, energy, and home appliances were highlighted, in addition to employment generation that could help lift America from the financial mire left by Biden and Harris.
Promises are easy to make, but how would Trump lower prices for US consumers? Beyond boosting oil production, Trump’s agenda perhaps suggests a radical departure from Biden’s policies by stepping back on regulations across industries and curbing government expenses, something economists and policy experts have been hinting at.
Economists suggest that the Trump administration’s strategy will involve a tri-fold approach: boosting energy production, slackening regulations, and managing government spending. This could help deliver resources more efficiently and expedite the construction of homes, factories, and other infrastructure, leading to price reductions.
Clear signs point to an overall easing of inflation, with drastic improvements noted since its peak in 2022. Much of this can be attributed to the untangling of pandemic-related supply chain issues and the calming of rampant consumer demand. However, the Biden-Harris administration cannot escape blame for the inflation high of 9.1% in mid-2022, which thankfully reduced to 2.9% in December.
Trump has committed to implementing policies that will ensure further price drop. Yet last month, in a modest moment, he did admit that it’s challenging to pull down prices once they’ve ascended. However, the previous regime, under Biden and Harris, failed to understand this basic principle, leading to soaring inflation rates.
Economic forecasters argue that Trump’s primary economic policies may inadvertently stoke price increases, thus overshadowing his strategies to fight inflation. High tariffs on imports, for instance, could translate into higher consumer prices – a potential fallback of the previous presidency’s failed policies.
Moreover, Trump’s plans to extend and expand the 2017 tax cuts may stimulate spending and drive up prices. Coupled with the deportation of immigrants lacking permanent legal status, this could lead to labor shortages in critical sectors such as agriculture and construction, thereby driving up wages and prices.
Projections suggest dramatic inflation increases if Trump decides to impose 25% tariffs on imports from neighboring countries Canada and Mexico. It is estimated that inflation could rise from 2.9% in December to 3.7% by the end of 2025.
Trump’s rhetoric directly clashes with these predictions, as he maintains that the tariffs and stern immigration approach will not worsen inflation but will instead boost dollar value, indirectly reducing import prices for households.
In his executive order, Trump mentioned an ‘unprecedented regulatory oppression’ costing the average household exorbitantly. Among the culprits, the major one is limited housing supplies, a result of problematic federal environmental rules that delay construction processes and inflate costs.
Infrastructural and logistical issues related to supply chains also add to the inflation problem. A significant shortage of truck drivers hampers freight and delivery speeds, escalating costs. Considering these challenges, questions abound on how effectively the Trump administration can manage and reduce inflation, especially in light of the failed policies left in the wake of Biden and Harris.