Trump pulled off the greatest political comeback in U.S. history after inflation hit a 41-year high under President Joe Biden. It has since come down but remained above the Federal Reserve’s preferred rate, and the cumulative price increases continue to bother consumers. Now he is betting his legacy and perhaps the success of the rest of his term on voters tolerating higher tariffs on imported goods.

Many 2024 voters hoped Trump would restore the pre-pandemic economy, during which both unemployment and inflation were low and the stock market hummed along. An economic downturn caused primarily by COVID-19 lockdowns brought the Trump boom to a halt and cost him the 2020 election. Four years later, Trump was no longer held as responsible for the business closures.

Even before the tariffs announcement on Wednesday, the stock market and consumer confidence have dipped over the uncertainty. So have Trump’s poll numbers on the economy, even as his overall job approval ratings remain solid compared to his first term.

Trump is operating under the theory that the U.S. structural trade deficit is less a product of market forces than the mercantilist practices of our trading partners. Allies and rivals erect trade barriers, subsidize industries, and manipulate their currencies to improve their share of the global marketplace. 

Many of these countries are more dependent on access to U.S. markets than the other way around. Trump and his advisers believe that gives Washington the leverage to get foreign countries to tear down their trade barriers or relocate production to America to avoid the tariffs.

“The idea that tariffs lower overall efficiency assumes the world is operating under conditions of free exchange among equal partners,” writes the financial journalist John Carney, who is generally supportive of the Trump plan. “But when our trading partners are not maximizing efficiency, but rather maximizing dominance, the free-trade logic collapses.”

If successful, the tariffs might lead to more jobs and production domestically. They could also be short-lived if foreign governments respond as Trump envisions. But even he concedes there will be short-term pain during the transition. Most economists do not believe that what he wants to do is possible in theory. Even many tariff supporters acknowledge that it will be difficult in practice and that the messaging around Trump’s trade policy has been erratic.

A spike in inflation or a recession could prove costly to Trump and Republicans. The tariffs are being implemented 19 months before the midterm elections and long before the 2028 presidential election. That would give the economy time to recover or for Trump to course-correct if the tariffs do not work as he intends.

Ronald Reagan supported Federal Reserve Chairman Paul Volcker’s tight-money policy to curb inflation early in his first term. This resulted in a recession in 1982, with unemployment reaching a post-Great Depression high of 10.8% and Republicans losing seats in the midterm elections. Reagan’s own vice president had labeled his program “voodoo economics” during the 1980 Republican primaries. 

But inflation subsided under the tight money and Reagan’s pro-growth tax cuts started kicking in. An economic boom began in 1983 and gross domestic product was expanding by nearly 7% when Reagan sought reelection, which he won in a 49-state landslide.

There are other possible scenarios, however. George H.W. Bush of voodoo economics fame lost his reelection bid in 1992 because of the lingering effects of a recession that had technically ended in March of the previous year. Bill Clinton, his Democratic challenger, successfully branded it the worst economy since the Great Depression, even though the aggregate data was not as bad as the public perception.

Biden also repeatedly tried to point to metrics other than inflation to argue the economy was not as bad as the voters thought. This did not work, not even once inflation began to trend downward. A warning sign for Trump is that voters were more interested in prices, which had risen by about a fifth in a few short years, than other data points.

Voters have also frequently lacked the patience for major transformations of the economy. Clinton’s Democrats lost control of the House for the first time in 40 years after his administration introduced an unpopular healthcare reform bill. Barack Obama’s Democrats suffered even worse losses in the House after passing one. 

Republicans already have a razor-thin majority in the House and are plagued by low turnout in off-year elections, as seen once again during Tuesday night’s elections in Wisconsin and Florida. 

Trump is constitutionally ineligible to seek another term in 2028, though there has been plenty of discussion about whether he can find a way to do so. Vice President JD Vance, like former Vice President Kamala Harris, would potentially have to run on an incumbent president’s economic record.

Another issue is that support among congressional Republicans for Trump’s tariff agenda is quite thin. It is not clear how patient lawmakers will be in the face of any public backlash against the tariffs and it is possible bipartisan majorities will try to chip away at his congressionally granted powers to unilaterally impose them.

FREE TRADE IS AN IQ TEST 

There is no issue on which Trump has been more consistent than on trade. “I’ve been talking about it for 40 years because I saw what was happening,” he said at Wednesday’s announcement. “If you look at my old speeches where I was young, very handsome, people would say I’d be on a television show, I’d be talking about how we were being ripped off by these countries. … It’s such an honor to be finally able to do this.”

Now Trump is staking both his reputation for business acumen and his populist reinvention of the Republican Party on these convictions, against the advice of most voices in Washington and on Wall Street. He is betting the House — and control of the rest of the federal government too. Trump is finally able to do this.