Trump is about to discover the political cost of inflation

The great slayer of political careers – inflation – has come for Donald Trump. The irony is that it won’t be the racist rhetoric, his role in the Capitol riots, or the self-sabotaging tariffs that remove the Teflon, but something entirely more mundane: gas prices.They have averaged over $4 a gallon for a record 169 days, a timeline that runs concurrent with the Iran war. The average cost of gas in California, the most expensive state, has been over $6 since late September. Car ownership is a necessity in many parts of the US, with motorists spending on average two-thirds more on fuel than their European counterparts. That’s why fuel costs are such a flashpoint. READ MOREThe country’s 196,000 gas stations and their price billboards serve as a daily reminder of Trump’s failed war aims, a political burden he now carries into the midterm elections. Polls suggest he will lose big.[ US and Israel draw up plans for renewed strikes on Iran after midterm electionsOpens in new window ]The latest Reuters/Ipsos survey indicates Trump’s approval rating has fallen to a record low of 31 per cent. It was 44 per cent at the same point in his first term.More worrying for Trump’s avowedly pro-business administration is that more than two-thirds (68 per cent) of voters disapprove of his handling of the economy, including 37 per cent of republicans.Asked which party they would vote ⁠for if the elections were held today, some ​47 per cent of registered voters chose Democrats, while 35 per cent chose republicans. The 12-point advantage in favour of Democrats ​is the widest in the current election cycle and could, if translated into actual votes, see the Democrats seize control of both houses, the House of Representatives and the Senate.[ What are the US midterms? A visual guideOpens in new window ]This would hobble Trump’s presidency as Democrats would be in a position to block cabinet and judicial appointments while having subpoena powers to investigate the administration.The top Democrat on the House oversight committee, Robert Garcia of California, says he will prioritise the examination of Trump’s family businesses, the Epstein files, immigration enforcement, corporate profiteering, and how US health secretary Robert Kennedy jnr has handled vaccines.US inflation accelerated to 3.7 per cent (in annual terms) in September, according to the Bureau of Labor Statistics. This was faster than the annual growth in wages (3 per cent), meaning real wages are falling.Trump’s big mistake has been to dismiss this marker or at least be insensitive to it, repeatedly telling voters that the economy is great and that they’ve never had it so good. “We have the hottest country anywhere in the world,” he repeatedly says at rallies.To be fair, the US economy is faring better than many had predicted in the wake of his sweeping “Liberation Day” tariffs in 2025. Unemployment has been at or below 4.5 per cent for 60 consecutive months, a postwar record. Consumer spending remains solid while business investment is being fuelled by the AI boom.But Trump is falling into the same trap as his predecessor, Joe Biden, in talking up the macroeconomy when consumers and households are being screwed by the micro one: prices. Jame Carville’s’s famous maxim, “It’s the economy, stupid”, might need to be refined to “It’s the price economy, stupid”, to highlight what matters most to voters in the 2020s.The Irish Government has learned not to make political capital out of its turbocharged GDP numbers or its windfall taxes, as it only antagonises households in the grip of a price squeeze.But Trump can’t help himself. US inflation peaked at 9 per cent in June 2022 as the reopening of the economy after the pandemic led to a burst in price growth. A year later it had fallen to 3.1 per cent and by Trump’s election win in November 2024, it was down to 2.6 per cent. It had been expected to fall to the Federal Reserve’s target rate of 2 per cent by the end of 2025, paving the way for growth-affirming interest rate cuts.But Trump destroyed that trajectory by imposing tariffs on imported goods. Inflation stopped falling and started to rise again, hitting 3 per cent in September 2025.Even with the tariffs, US inflation would probably have slowed again this year if the US leader hadn’t gone to war with Iran, triggering a spike in global oil prices.This has not just driven up petrol prices but also the cost of diesel, the fuel needed to transport everything. The full ramifications of Trump’s war can be seen through the prism of producer prices, which surged by 6.3 per cent in September. This will translate into further consumer price inflation in the coming months.High inflation is also resulting in upward pressure on interest rates, further anchoring household spending and Trump’s poll ratings.Trump’s political shtick has always been to proclaim everything he touches gold. It won’t wash this time.