WASHINGTON — A sporadic global trade war led by President Trump is fueling inflation across the U.S. economy, elevating prices on everyday goods, as the war with Iran sends the price of gas on a roller coaster.
Aggressive tax cuts have pushed the national debt past $40 trillion, driving a growing crisis in the bond market. And an unprecedented immigration crackdown is disrupting the labor supply in agriculture, construction, hospitality and food processing, raising prices even further.
Approaching the halfway point of Trump’s second term, a president who won reelection based on a promise to turn the economy around now faces a reckoning in the midterm elections centered largely on his economic record.
Trump’s economic agenda has emerged as an increasingly awkward liability for Republicans heading into the November elections, leaving lawmakers to defend policies that have delivered political pain at home, even as the White House argues they will pay off in the long run.
Polling on Trump’s handling of the economy has remained in precariously low territory throughout the summer, entering Labor Day weekend with less than a third of Americans supporting his job performance on their most pressing concerns. One recent poll, from the University of Massachusetts Amherst, found that only 22% perceive the economy in a good or fair state.
Shoppers at Lincoln Heights Certified Farmers Market in Los Angeles on Wednesday.
(Jason Armond / Los Angeles Times)
And Americans’ confidence in the economy is unlikely to improve much ahead of election day, Nov. 3, in part because bad economic news has shown to sink confidence fast. Good news takes much longer to win people back, experts said.
“Voters’ opinion of the economy has mostly hardened,” said Aaron Klein, chair of economic studies at the Brookings Institution. “People vote the economy of the spring and summer, not November.”
Good news has been harder to come by.
Heading into the holiday weekend, Trump dismissed communities opposed to data-center construction as “backwards and poor.” A rapidly escalating trade dispute with Canada threatens Republican gains in battlegrounds along the northern border that could determine control of the Senate.
Sean Zabriskie, center, helps his son Connor, 7, try on hockey pants at The Ice Box Hockey shop in Harbor City. The trade war between the U.S. and Canada is affecting products like hockey gear, most of which is made in Canada and imported to the U.S.
(Genaro Molina / Los Angeles Times)
And fresh polling found that more than 90% of Americans believe corruption is rampant in Trump’s government, even as the president spends hundreds of millions of dollars on vanity projects across the capital.
Susan Collins, the incumbent Republican senator from Maine seeking another term in a strategically critical race, chastised the Trump administration for its latest trade spat with Ottawa as “making the job harder” of securing reelection.
“There’s just nothing good you can say about them,” Collins said of the tariffs.
Trump has pushed back on criticisms of his record, declaring the country has “the greatest economy we’ve ever had” and touting what he calls a manufacturing boom, all while distancing himself from potential midterm losses.
“I’m not affected by the election,” Trump told reporters last week. “I’m not running. But my party’s running, and I’m going to help my party.”
But Rep. Mike Johnson, a Louisiana Republican and speaker of the House, said last week that the midterms would serve as a referendum on Trump’s presidency.
Rep. Aisha Wahab (D-Hayward) and Speaker of the House Mike Johnson (R-La. ) arrive for a ceremonial swearing-in at the Capitol in Washington, D.C., on Sept. 2.
(Andrew Harnik / Getty Images)
“Even though his name isn’t in the midterm, his legacy is,” Johnson said. “The America First priorities and principles are. His administration is.”
Several embattled incumbents fear that’s the case and are distancing themselves from the president. Several Republican lawmakers — including Reps. Tom Barrett of Michigan and Zach Nunn of Iowa — plan on skipping a midterm GOP convention called by Trump for this week in Texas.
Joanne Hsu, director of the University of Michigan’s Survey of Consumers, said that gas prices were a chief frustration among Americans, and found that consumer sentiment soured rapidly once it became clear the conflict in Iran would not be short-lived.
“Consumers are absolutely not feeling great about the economy right now, and the factors that are underpinning their frustrations with the economy at this time are factors that are pretty tough to turn around on short notice,” Hsu said.
Even if the Iran conflict reached a resolution, confidence in the economy is likely to change only when the prices are reflected at the gas station, she said.
“When it comes to the views of the economy, it’s really about what’s happening to my wallet,” Hsu said.
During a White House press media briefing on Thursday,Vice President JD Vance acknowledged the Iran war has led gas prices to rise and that he does not know when Americans can expect those prices to go down.
Vice President JD Vance talks to reporters during a news briefing at the White House on Sept. 3.
(Chip Somodevilla / Getty Images)
“The reason gas prices are so high now is because the Iranians are shooting at commercial shipping,” Vance said. “Gas, frankly, could have been much, much higher were it not for our efforts. But I am not going to make a promise about when it is going to return to $3.”
The day after Vance spoke, diesel hit a record all-time high of $5.85 a gallon. In California, it sold for as much as $7.71.
Yet Trump has tried to downplay the economic pressure the war in Iran is placing on Americans, in particular as the Strait of Hormuz — a vital shipping corridor for oil and gas — remains under threat by Iranian troops.
Diesel prices over $7 a gallon are displayed at a gas station in Los Angeles on Aug. 21.
(Justin Sullivan / Getty Images)
“We have the Strait of Hormuz in extremely good shape,” Trump said, adding that the U.S. Navy has escorted ships through the channel. “A lot of oil is coming out. That’s why you haven’t seen the price of oil going the way they thought it might have to go.”
Trump on Monday also touted an agreement with the Venezuelan government to develop a vast amount of the South American country’s oil reserves. Asked how he sees the deal affecting American consumers, Trump said: “Ultimately prices are going to come down.”
One of the Arts of War statues, newly covered in gold leaf, is visible at Arlington Memorial Bridge near the Lincoln Memorial in Washington, D.C.
(Andrew Harnik / Getty Images)
“Now, will it happen before the election? I can’t tell you that. But I think people are very smart,” he said.
For some Americans, the economic pressures are a key driver ahead of the midterm elections.
Monica Escalante, a home care provider who is a member of the United Domestic Workers union, said she started feeling the pinch on her wallet after Trump imposed sweeping tariffs on a number of products she buys at the grocery store. Gas, she noticed, became harder to cover after the Iran war started.
Escalante, who lives in Bakersfield, said she also has to drive her client to the grocery store, and that mileage reimbursements are not enough to cover her costs.
“It’s really hard when I don’t have the money for gas, and she doesn’t have the money for gas. Then it is like: What do we do?” she said. “It is either she’s borrowing or I’m trying to figure out how I can get gas in my tank.”