A shopper browses the condiments aisle. Condiments are covered by the USDA Supplemental Nutrition Assistance Program. – George Walker IV\/AP <\/p>\n
President Donald Trump swept into office with a bold plan to remake America\u2019s economy<\/a>. But the realities of a persistent affordability crisis<\/a>, low favorability ratings and biting election losses for his Republican party are forcing him to remake his plan on the fly.<\/p>\n Although still in the early stages, Trump\u2019s Plan B appears to be a spaghetti-on-the-wall strategy that includes $2,000 tariff rebate checks, 50-year and portable mortgages and lower tariffs on common grocery items.<\/p>\n<\/p>\n Each tactic comes with significant question marks \u2013 and some are so radical economists fear they could squeeze Americans\u2019 finances even more.<\/p>\n The original Trump economic plan was based on three bold assumptions<\/a>:<\/p>\n America could bring in hundreds of billions of dollars \u2013 perhaps even trillions \u2013 through tariffs that would fill the country\u2019s coffers without causing inflation to rise.<\/p>\n Massive government spending and regulation cuts could potentially save $1 trillion or more each year. It would incentive businesses to grow and invest in the United States, creating a hiring boom. It could also lower bond yields, which would reduce borrowing costs for mortgages, car loans and credit cards.<\/p>\n The spending cuts and tariff revenue would pay for a gigantic tax cut that would lower the cost of living for Americans.<\/p>\n For the plan to come to fruition, all three parts had to work perfectly. That\u2019s because each part relied on the other. If one leg of the stool was loose, the whole thing would topple over.<\/p>\n As it turns out, some parts didn\u2019t work.<\/p>\n Boosted by deregulation of AI companies and tax cuts, the stock market has roared higher. But consumer prices haven\u2019t fallen \u2013 they\u2019ve continued to rise. Inflation remains relatively low, but it is picking up, in part because of tariffs.<\/p>\n High-profile corporate promises to invest in US manufacturing could take years to bear fruit. Meanwhile, the tax cuts and deregulation have failed to persuade American businesses to make the level of investment that the Trump administration had hoped for. Overall hiring in the United States has come to a standstill in recent months.<\/p>\n Bond yields have fallen but not enough to make a major difference. Mortgage rates remain above 6%, and the number of subprime borrowers defaulting on their auto loans has doubled over the past four years<\/a>, according to Fitch Ratings.<\/p>\n It may be early to judge Trump\u2019s economic plan less than a year into his second term, but Americans are increasingly fed up. A recent CNN poll conducted by SSRS<\/a> showed that 72% of Americans say the economy is in poor shape, and 61% say Trump\u2019s policies are making the economy worse. A Democratic sweep of this month\u2019s elections showed a significant leftward shift in former Trump voters and proved affordability was front and center in voters\u2019 minds when they went the polls.<\/p>\n Story Continues <\/p>\n Now, a new plan is emerging.<\/p>\n Tariff dividends: Trump last weekend floated the idea of $2,000 tariff rebate checks<\/a>, a proposal he\u2019s mused about before but which seemed to initially catch his advisers off guard this time. White House Press Secretary Karoline Leavitt, however, doubled and tripled down on the proposal this week, saying a plan was actively being considered.<\/p>\n Using tariff revenue to issue a kind of stimulus check would need congressional approval, and that may be a tough sell when inflation is on the rise again. Economists warn that sending households thousands of dollars could trigger a rush of demand for goods without adding supply to the market. That imbalance could raise prices even more, exacerbating inflation<\/a>.<\/p>\n 50-year mortgages: Trump this week acknowledged that his administration is considering a 50-year mortgage<\/a>, which could lower homebuyers\u2019 monthly premiums by drastically extending the length of their home loans. Federal Housing Finance Agency Director Bill Pulte called the proposal \u201ca complete game changer.\u201d<\/p>\n But critics argue that a 50-year mortgage will ensure many borrowers never actually own their homes<\/a>. Money that some borrowers could have saved for retirement would end up paid to banks in the form of higher interest payments. The length of the loan also means the total interest ultimately paid on a loan would jump.<\/p>\n All of that could harm Americans\u2019 long-term financial security.<\/p>\n Portable mortgages: Pulte this week said the Trump administration was considering a portable mortgage<\/a>, which would allow borrowers to maintain their existing, lower-rate home loans when they purchase a new home. That could potentially thaw the frozen US housing market by giving homeowners the assurance that they could keep their relatively low mortgage payments when they move \u2013 even as current mortgage rates remain high.<\/p>\n But industry experts worry that the logistics of a portable mortgage plan could be difficult to overcome. The plan would require borrowers to cover the cost difference between the new home and the old one, which could mean a second mortgage. And it could throw a wrench in the gears of the investment market that keeps the mortgage market flowing, unintentionally raising mortgage rates along the way.<\/p>\n Lowering some tariffs: Treasury Secretary Scott Bessent this week said that the administration will announce lower tariffs on produce<\/a> that isn\u2019t grown in the United States, including bananas and coffee. \u201cThat will bring the prices down very quickly,\u201d Bessent said.<\/p>\n That could reduce import prices, but it probably won\u2019t have a dramatic effect on consumer prices. So far, businesses have chosen to pay roughly 80% of the tariffs\u2019 cost, according to a recent JPMorgan analysis. And the produce Bessent mentioned may be particularly bad examples: Coffee prices were surging because of climate change, long before tariffs kicked in, and Americans\u2019 fixation on coffee ensures that companies can keep their prices high. Bananas are particularly low-priced fruit that won\u2019t dramatically relieve grocery price pressures.<\/p>\n A significant amount of political capital remains at stake: Trump won reelection on the economy, criticizing former President Joe Biden for failing to address the rising cost of living after the post-pandemic inflation crisis. Trump\u2019s promise to cut prices on Day One was always unrealistic, but his signature economic policy, tariffs, has proven unpopular, as Americans associate the tariffs with higher costs.<\/p>\n Instead, the administration\u2019s policies may be exacerbating the so-called K-shaped economy<\/a>, in which wealthier Americans benefit from their growing investments in the stock market while lower-income Americans increasingly live paycheck to paycheck.<\/a><\/p>\n Trump\u2019s immediate reaction to the GOP\u2019s election losses and new polls was denialism: He claimed, falsely<\/a>, that prices have, in fact fallen during his administration.<\/p>\n But the administration is beginning to shift its focus and acknowledge Americans want the White House to do more to address their high cost of living. Administration officials told CNN\u2019s Alayna Treene that Trump is getting more frequent economic briefings<\/a> and has been encouraged to spend more time on domestic travel and policies.<\/p>\n And Bessent this week coined a new Trump-approved phrase: \u201cMake America Affordable Again.\u201d The devil, as always, will be in the details.<\/p>\n Shipping containers on a ship at the Port of Oakland. Trump has imposed broad tariffs on imports from around the world. – Justin Sullivan\/Getty Images <\/p>\n