Inflation played a pivotal role in the 2020 Presidential Election, impacting voter concerns about rising prices on essentials. With a 20% increase in costs since January 2021, the Republican party labeled this “Bidenflation.” A significant majority of voters expressed worries over food and healthcare expenses. While inflation peaked at 9.1% in June 2022, it decreased to 2.4% by September. Proposed protectionist policies by Trump could threaten to drive inflation higher again, according to economists.
How Inflation Influenced the 2020 Presidential Election
The election of Donald Trump as President of the United States was significantly influenced by the inflationary trends that have been impacting the nation since 2021. Ironically, the economic strategies proposed by the Republican billionaire may contribute to further price increases.
Americans have experienced an overall price hike of approximately 20% across essentials such as eggs, gasoline, and insurance since Joe Biden assumed office in January 2021. This phenomenon has been characterized by the Republican party as “Bidenflation.”
“Inflation was a crucial factor in the election,” remarked Bernard Yaros, an economist at Oxford Economics, in an interview, while also highlighting other influential elements, including immigration.
Voter Concerns and Campaign Promises
A recent AP VoteCast survey, which included over 120,000 voters nationwide, revealed that 90% of respondents expressed significant concern over food prices, while around 80% were worried about healthcare, housing, and fuel costs.
Throughout his campaign, Donald Trump consistently vowed to tackle inflation, warning voters that prices would remain elevated if Kamala Harris were to take office. This message resonated with many constituents.
Despite the concerns, inflation has seen a substantial decline since peaking at 9.1% year-over-year in June 2022. By September, it dropped to 2.4%, marking the lowest rate since February 2021.
Bernard Yaros explained that the public’s perception of inflation differs from economists’ year-over-year assessments, as consumers tend to focus on absolute price levels. “There is a continuing sense of frustration regarding high costs,” said Joanne Hsu, director of the University of Michigan survey on consumer confidence.
With rising prices squeezing household budgets, many families—especially those with lower incomes—are prioritizing essential expenditures over discretionary spending like dining out, entertainment, and vacations.
“Essential goods are now taking up a more significant portion of household budgets, which causes dissatisfaction among consumers,” Yaros noted.
Even though wages are increasing at a pace that outstrips inflation, workers still feel deprived, focusing instead on what they perceive they have lost.
This inflationary environment, reminiscent of the late 1970s and early 1980s, has been exacerbated by global challenges stemming from the COVID-19 pandemic. The economic recovery was also supported by generous aid and investment plans enacted by the Democratic administration.
Former Treasury Secretary Janet Yellen defended the economic strategies at that time, asserting that these measures helped avert even more severe economic turmoil and facilitated a swift rebound.
American growth has notably outpaced that of many European nations. However, Trump’s proposed protectionist policies and broad tariff increases could potentially drive inflation back up.
According to economists at UniCredit, if Trump were to implement all proposed tariff hikes, it could increase American inflation by approximately 1.3 percentage points in the first year. They further noted that while the inflation impact would diminish over time, GDP could see an accumulated increase of about 0.6% over several years.