WASHINGTON — Few policy areas were more central to President Donald Trump’s comeback campaign last year than inflation, daily costs facing Americans and his pledge to lower prices after the Biden administration struggled to rein in the excesses of an economy rapidly recovering from the turmoil of the COVID-19 pandemic.
Nearly 40% of voters said the economy was their No. 1 issue last fall, according to The Associated Press’ VoteCast survey of more than 120,000 voters in the final week of the election. Trump won voters who said their family finances were “falling behind,” roughly 30% of the electorate, by nearly a 2-to-1 margin. And among the 67% of voters who said they were “very concerned” about the cost of food and groceries, Trump outpaced then-Vice President Kamala Harris 61% to 38%.
“Under my leadership, we are quickly going to turn this economic nightmare into an economic miracle," Trump said during his final campaign stop in Pennsylvania on the eve of November’s election. "We're going to do great things. We're going to make America wealthy again, and we're going to make America affordable — we have to get the prices down.”
But 100 days into his second White House term, his global trade war and significant tariffs on key U.S. trade partners have threatened global markets — denting the retirement funds held by millions of Americans — and triggered warnings from economists and financial institutions that his policies, if left unabated, would raise consumer costs and contribute to higher inflation that could lead to an economic recession.
“Unemployment is likely to go up as the economy slows, in all likelihood, and inflation is likely to go up as tariffs find their way and some part of those tariffs come to … be paid by the public,” Federal Reserve Chair Jerome Powell said in Chicago earlier this month, warning that tariff-induced inflation could be hard to combat once it takes hold.
A major measure of inflation and rising costs for Americans, the Consumer Price Index calculated by the U.S. Bureau of Labor Statistics each month reported prices on key U.S. goods and services fell 0.1% overall in March compared to February. But food prices, electricity and utility gas prices, and health care costs all rose. And major economic forecasters and prognosticators warned the slight overall decrease was not going to last, as tariffs — taxes levied on imports from other countries typically paid by U.S.-based importers who then pass much of the cost onto consumers — continue to be implemented.
Trump has also continuously been misleading in his public statements on the prices of gas, eggs and other key products and services Americans rely on.
Earlier this month, Trump claimed gas prices had dropped below $2 “in a couple of states,” despite gas prices not being that low anywhere in the country at the time, according to gas pricing tracker GasBuddy. Gas prices overall have largely remained steady at around $3.10 a gallon on average nationwide since Trump returned to office after declining steadily from nearly $3.70 a year ago.
The president also claimed last week that eggs dropped 93% to 94% in price since returning to office, meaning eggs would cost less than 40 cents per dozen. The most recent data pinned the national average for a dozen eggs at about $6.23 in March, an all-time high, but the rising costs predate Trump’s return to Washington and can largely be attributed to the ongoing bird flu outbreak, though the Justice Department is also investigating egg producers for alleged price fixing.
“Wholesale egg prices down are about 50% since President Trump took office,” the White House boasted in a memo on Tuesday. “Most consumers have seen relief in prices on the shelf, but all consumers should see it within the next month or two.”
But as the U.S. has turned to foreign markets to import eggs to supplement the losses of domestic egg-laying hens, Trump’s agriculture secretary, Brooke Rollins, said the administration is considering tariffs on egg imports, which would likely result in higher prices.
Tariffs as a tax on U.S. consumers
While Trump has waffled on his tariff regime multiple times in the three months since returning to office, he currently has a 10% baseline tariff on most imports from most countries, a 25% tariff on steel and aluminum products, a 25% tariff on cars with another 25% on auto parts slated to begin next month (thought the administration said it would alter those tariffs to reduce the severity on Tuesday), 25% tariffs on some imports from Canada and Mexico, and a 145% tariff on all imports from China. China has implemented its own massive tariff regimen on U.S. exports, and Canada has responded in kind. The European Union has approved tariffs of its own if negotiations fail.
Combined, the U.S. imports around $2 trillion in goods from China, Mexico, Canada and the European Union each year. Even as Trump’s administration works to cut deals with those trading partners and other nations, he views broad-based tariffs on foreign imports to be sound economic policy and described in a recent Time magazine interview a world where 20% to 50% tariffs being in place a year from now as “total victory” because the U.S. government “will be making a fortune.”
But economists, Democrats and other critics have described the tariff policy — which Trump argues will force countries into better trade deals for the U.S. and ultimately bring significant manufacturing back to the states — as effectively a massive tax hike on everyday Americans. Foreign governments don’t pay the tax and, in nearly all cases, neither do foreign companies.
“This is increasing taxes on U.S. consumers," Paul Donovan, chief economist for UBS Wealth Management, warned earlier this month. "And they're going to have to find the money to pay these taxes."
Yale’s Budget Lab projects that Trump’s tariffs could cost American households up to $4,900 a year. Trump has argued that “some pain” may be experienced by Americans in the short term, but that “it will all be worth the price that must be paid."
The Editorial Board of The Wall Street Journal, owned by the right-wing media mogul and longtime Trump ally Rupert Murdoch, wrote recently that “we wonder if the working-class voters who are supposed to be the vanguard of the new GOP will feel as good about the pain as they try to make ends meet paycheck to paycheck” after the president’s chief trade adviser, Peter Navarro, framed the projected $6 trillion the administration expects to raise from tariffs over the next 10 years as a “tax cut.”
“George Orwell, call your office," The Journal's editorial board wrote. "In the real economic world, a tariff is a tax. If you raise $600 billion more a year in revenue for the federal government, you are taking that amount away from individuals and businesses in the private economy.”
The fiscally conservative Tax Foundation, founded by major corporate executives in the 1930s and an organization that continues to advocate for lower federal taxes and spending, described Trump’s tariff policies as “the largest tax hike since 1993” and “larger than the tax increases enacted under Presidents George H.W. Bush and Barack Obama.”
Many Americans view the tariffs similarly, polling shows, and are growing increasingly nervous about the economy in Trump’s second term and dissatisfied with his stewardship of their economic well-being.
Nearly 70% of U.S. adults in a CBS News/YouGov poll last week said Trump was focusing “not enough” on lowering prices, while north of 60% said he was focusing “too much” on tariffs. In that poll, 48% said Trump’s policies were making them “financially worse off,” while only 19% said they thought their financial situation was improving. A whopping 63% said they believed Trump’s policies were making food and grocery prices go up.
Roughly 50% of registered voters polled by The New York Times and Siena College last week also said Trump was making the economy worse, with just 21% saying he was making it better. A CNN/SSRS poll had his approval rating through the first 100 days lower than any president in the same period in 70 years. The New York Times’ approval rating tracker of public polling has Trump averaging out at 44% approval and 53% disapproval.
And a Reuters/Ipsos poll of 4,306 adults from earlier in April found just 37% of Americans approve of Trump’s handling of the economy, his worst mark ever as president in that poll.
“These presidential terms are roller coasters sometimes,” House Speaker Mike Johnson,, R-La., said on Monday at the Capitol. “There’s been a little tumult in the markets with the tariffs policy and all of that, but I think all this is settling out.”
Consumer confidence in the state of the U.S. economy has fallen 32% since January, “the steepest three-month percentage decline seen since the 1990 recession,” according to the University of Michigan’s Survey of Consumers director, Joanne Hsu. That survey, a key indicator held in high regard by policymakers and prognosticators alike, found that U.S. consumers in April expected weaker income growth in the year ahead and that middle-income families were a cohort who were most drastically expecting worse financial conditions. Another consumer confidence survey by the nonprofit The Conference Board released on Tuesday found consumer’s perception of the economy was at its lowest level since May 2020, the height of the COVID-19 pandemic.
And tariffs are only becoming more tangible for everyday Americans, with major online retailers hiking prices and pinning the blame on Trump’s policies. Singapore-based, China-founded fast fashion giant Shein raised prices last week on its top 100 beauty and health products by an average of 51% and its home, kitchen and toy products by more than 30%, according to Bloomberg News.
Another Chinese online retailer, Temu, has begun adding “import charges” of roughly 145% to purchases, according to a CNBC analysis. White House press secretary Karoline Leavitt slammed Amazon on Tuesday morning after reports emerged the company was considering a similar tactic that Leavitt described as a “hostile and political action,” but Amazon quickly denied such a policy was ever under consideration for its main website.
What’s next
Trump claimed last week he has “200 deals” in the works with countries across the world to negotiate down tariffs before the scheduled July 9 end to his 90-day pause on the wide-ranging “reciprocal” tariffs he announced on “Liberation Day” at the beginning of April. But details have been sparse and China has denied Trump’s claim that negotiations between the two global economic powerhouses have commenced.
Beyond tariffs, Trump is pushing Congress to pass broad tax cuts to ease the burden on Americans, including extending his 2017 tax cuts and an unlikely new proposal to cut income taxes he began pitching Sunday. But the House and Senate Republicans remain far apart on tax plans. Treasury Secretary Scott Bessent said Monday the White House wants the president’s agenda passed in the House by July 4, but Johnson said he thinks his House GOP caucus could have it done by Memorial Day.
“We're going to make a lot of money, and we're going to cut taxes for the people of this country," Trump said at a New Jersey airport Sunday before boarding Air Force One back to Washington. "It'll take a little while before we do that. But we're going to be cutting taxes. And it's possible we'll do a complete tax cut. Because I think the tariffs will be enough to cut all of the income tax.
“If people only understood the tariffs,” Trump bemoaned.