President Donald Trump entered his second term promising a sweeping reconstruction of the U.S. economy. Yet persistent inflation, slowing hiring, investor unease, and a sharp political backlash are forcing the administration to improvise. With affordability now the defining political issue and recent election results revealing a decisive shift among former Trump voters, the White House is accelerating a new economic strategy—one far less cohesive than the original plan and far more experimental. The stakes could not be higher: 72% of Americans say the economy is in poor shape, and the administration is struggling to regain control of the narrative.

Why Trump’s Original Plan Is Straining Under Its Own Assumptions

Trump’s economic vision rested on a three-part architecture: large-scale tariff revenue, deep spending cuts, and a massive tax reduction that would offset rising living costs. The plan was highly interdependent—each element succeeding only if the others delivered with precision. Instead, several pillars faltered. While deregulation and tax incentives helped propel equity markets to record highs, inflation remained sticky. Tariffs contributed to higher consumer prices, undermining the promise of a lower cost of living.

Corporate investment has lagged, with onshoring pledges slow to materialize and hiring momentum softening. Bond yields eased but not enough to significantly reduce mortgage or auto-loan burdens. Subprime auto delinquencies have doubled compared to four years ago, and homebuyers remain locked out of the market as mortgage rates sit above 6%. This combination of elevated prices and muted wage gains has fueled voter frustration, challenging the administration’s economic credibility.

A Rapid Pivot Toward Unconventional—and Risky—Policy Tools

As political pressure intensifies, Trump is experimenting with a “Plan B” built around more immediate consumer relief. The administration is considering $2,000 tariff rebate checks funded by tariff revenue—a proposal that resembles a stimulus program and would require congressional approval. Economists warn such checks could ignite demand without increasing supply, worsening inflation for households already squeezed.

Housing policy proposals are equally unconventional. A potential 50-year mortgage would reduce monthly payments but vastly increase lifetime interest—and could leave borrowers effectively renting from banks for decades. A portable mortgage system, allowing homeowners to carry their low-rate loans to new properties, may help unblock the frozen housing market but threatens to disrupt the secondary mortgage market that underpins U.S. lending.

Treasury Secretary Scott Bessent’s proposal to cut tariffs on common imports such as bananas and coffee is a more traditional lever, but analysts note it would barely dent broader food inflation. Commodity markets—not tariffs—have driven recent price increases.

An Economic Message at Crossroads

The affordability crisis is creating a political paradox. The stock market surge benefits wealthier Americans with significant investment exposure, while lower-income households face rising rents, costlier food, and higher borrowing costs—a classic K-shaped recovery. This divergence has amplified pressure on the administration to shift toward consumer-facing policies.

Trump, initially dismissive of negative polling, is now receiving more frequent economic briefings and is expected to increase domestic travel to address cost-of-living concerns directly with voters. The administration’s challenge will be balancing immediate political needs with long-term economic stability—an increasingly delicate calculation as inflation risks re-emerge.

What Comes Next

The coming months will test whether Trump’s evolving strategy can stabilize household budgets or whether the experimental mix of rebates, long-duration mortgages, and selective tariff cuts will compound existing vulnerabilities. Markets, investors, and households alike will be watching for clearer signals on whether Plan B is a stopgap—or the start of a fundamental shift in U.S. economic policy.