Suspended figures of ghosts, skeletons, rotted corpses/zombies, witches, and scarecrows are fairly common Halloween displays here in the suburban and rural Northeast. The suspension being from trees is common because there are trees everywhere here to hang them from. (Putting up poles for the purpose would be more strange.)
While the suspension is often from the neck because that is a convenient means of attachment (with the top of the head or the back being frequently used alternatives), it's more unusual to use a visible noose and rope, which obviously suggests the aftermath of a hanging (which could be either a judicial execution or a lynching). Still, it's possible to suspend a scarecrow by a visible neck rope and still have it read "scarecrow" rather than "lynching" or "hanging in effigy." (Think of the scene in The Wizard of Oz.) The details matter. A scarecrow would hang with its feet at or very near ground level, would have the hanging rope tied directly around the tree rather than thrown over a higher branch and tied off, would be dressed in worn or tattered farmyard clothing (e.g. overalls), and would not have its wrists or legs bound.
Ghosts or witches suspended higher would be simulations of the figures floating or flying, not lynchings. A pirate, outlaw, "Inquisition victim," or similar figure (whether depicted as partly rotted or as wretchedly still alive) could be suspended in a gibbet; that's a more elaborate and therefore rarer display but would not attract social controversy (though it might be objected to if deemed too gory or frightening).
The display in question, even if it really were intended as a generic non-racial Halloween horror scene ("some ordinary people of no particular type got themselves hung for no particular reason, how horrible!"), has everything wrong with it, making it difficult to charitably interpret that way. The figures' dress and proportions, the bound limbs, the rigging of the ropes, all read not only "lynching scene" but "lynching scene modified to depict present-day urban victims."
The juxtaposition of the Trump sign appears to be coincidental. (I would understand, and sympathize a bit, if the deliberate intended message had been "this is what Trump really stands for" in response to the neighbor's yard sign. Though that still would have been misguided, and in any case there doesn't seem to have been any such intent in that direction.)
So overall, I find the display quite objectionable and offensive, while in the interest of freedom of expression (and in the absence of any clear imminent threat of violence to any specific person on group) do not wish to see any legal sanctions or any private vandalism undertaken in response.