Trump vowed to reduce prices, but his policies have fueled US inflation | Steven Greenhouse

Donald Trump successfully campaigned for his second term two years ago promising to reduce prices on day one, but ever since he returned to the White House, he has done little to fight inflation or reduce prices. Instead, some of his most important policy decisions – most notably his war against Iran and his tariff wars – have increased inflation instead of reducing it. This helps explain why more than one-in-five Americans who voted for Trump now disapprove of the job he’s doing.Even though economists warned that tariffs would be inflationary, Trump has enthusiastically embraced them during his second term. Indeed, the “liberation day” tariffs he imposed soon after returning to office increased the price of hundreds of goods, including citrus fruits, steel, bananas, beef and auto parts. When the supreme court overturned those tariffs as illegal, Trump immediately imposed new 10% across-the-board tariffs that again helped push up prices (a lower court found those tariffs unlawful, too). Time and again, Trump has slapped on new tariffs even though they inherently push up prices because tariffs are a tax on imported goods. Little wonder that a Fox News poll this month found that 77% of Americans disapprove of how Trump has handled tariffs.Candidate Trump pledged to slash “energy and electricity prices by half”, to get “gasoline below $2 a gallon”, and to bring down “airfares and housing costs”. He has failed to do any of those things. Gas now averages $4.28 a gallon nationally, according to AAA. Yale Budget Lab says Trump’s tariffs will cost the average household $1,100 this year, while Moody’s Analytics says the war with Iran has already cost US households around $2,000 from higher energy, fuel and transportation costs and from higher interest rates.Worsening Americans’ affordability problems, prices have been rising faster than workers’ wages in recent months. As a result, Americans have seen no real wage growth on average since Trump returned to office – both average hourly pay and prices have risen by 5.4% since January 2025.Matthew Middleton, a White House spokesman, defended Trump’s record on inflation and critiqued Joe Biden’s, saying: “President Trump has implemented an aggressive, pro-growth economic agenda that has blunted Biden’s historic 40-year high inflation crisis, driven economic growth, increased wages and created private-sector jobs in areas that had been hollowed out and shipped overseas.”After returning to the White House, Trump helped push up electricity prices by ending federal subsidies for low-cost renewable energy. His gung-ho cheerleading for datacenters, along with his speeding up of federal permitting to build them, has helped fuel a datacenter construction boom that is expected to increase electricity costs to consumers by more than $6bn. Trump and the Republican-led Congress further hit consumers by raising the cost of many electric vehicles by $7,500 when they ended EV subsidies.When Trump plunged into war against Iran eight months ago, he showed little concern about what that war would mean for inflation back home. He ignored warnings that the war would cause Iran to close the strait of Hormuz, which in turn would cause oil and gas prices to soar. Since the war began, US gas prices have risen by over 40%, diesel prices by nearly 70%, and some fertilizer prices by 20%. Record diesel prices have pushed airfares skyward, while soaring diesel and fertilizer prices have created a sea of red ink for US farmers.In one tiff over inflation, after Trump said last June “I love the inflation,” senator Bernie Sanders responded, “You know who doesn’t love inflation, Mr. President? Working families struggling to afford gas, groceries and other necessities because of your disastrous actions.”Further defending Trump’s record on inflation, White House spokesman Middleton said: “The President has always been clear about temporary disruptions as a result of the Iran conflict, but this administration will continue to deliver economic wins for the American people over the next two years. While Democrats pretend to care about ‘affordability’, this administration has delivered tangible wins to make life more affordable for American families: President Trump signed the largest working-class tax cuts in history, cut the cost of prescription drugs, added more than one million private-sector jobs, locked in nearly 20 trade deals and will continue to put American workers first.”A White House official added that Trump’s policies “have created an environment for sustained increase in energy supply and lower costs for American households and businesses”. Those policies have included making it easier to drill for oil and reducing business and environmental regulations.Trump’s moves have further worsened Americans’ affordability woes by pushing up interest rates. By the time Biden left office, inflation, which had soared to a painful 9% during the pandemic, had slid to 3.0% and was heading lower. But Trump’s policies have played a major role in pushing inflation back up to 3.7%. That has caused the Federal Reserve to raise interest rates, while also pushing mortgage rates higher. Thirty-year fixed mortgage rates have climbed to 7.4%, making it considerably harder for young and non-affluent Americans to buy homes. (As for Trump’s 2024 promise to reduce housing costs, he refused to sign a bipartisan bill that sought to speed housing construction with the aim of making housing more affordable.)Under Trump, not only has the national debt climbed above $40trn, but this year’s federal budget deficit will reach $2tn. That worsening fiscal picture has worried bond investors and pushed up interest rates. (In 2019, Trump promised to eliminate the entire national debt within eight years.)Trump’s policies have increased healthcare costs for millions of Americans. By pushing Congress to cut Medicaid by $1tn and to not extend Obamacare subsidies, Trump helped cause more than 20 million people to lose health coverage or pay more out-of-pocket for healthcare. Americans who pay for their own health insurance saw their premiums jump by 25% this year, with many households paying not just hundreds of dollars more, but thousands more.To be sure, Trump has taken several steps to fight inflation, but most have been minor. His TrumpRX program has offered many drugs at lower prices, and that was one factor among many that contributed to the 4.5% drop in prescription drug prices over the past year. In August, Trump announced he would import 660m pounds of ground beef from Latin America to reduce beef prices – that move (which angered ranchers) was a direct response to the public outcry over the higher beef prices resulting from his tariffs. Last November, in a sharp about-face aimed at reducing prices, Trump rescinded his tariffs on coffee and tropical fruits after consumers had grown angry that coffee and citrus prices had soared due to Trump’s tariffs.With his promise to pay $5,000 to every adult if Republicans retain control of Congress, Trump is essentially saying he will make it up to voters for pushing up prices and worsening affordability problems. Trump says the money for those payments could come from tariff revenues, but guess where those tariffs revenues come from? They come from the money that US consumers have had to pay on Trump’s tariffs – on his taxes on imports. Some might say that Trump wants to pay Peter by first robbing Peter.Trump keeps saying that affordability problems are “a hoax”. But whenever average Americans go to a supermarket or gas station, they know that the affordability squeeze is real and a big issue in their lives. Many can see that Trump, despite his campaign promises, has done precious little to reduce inflation. Indeed, in very bad news for Republicans in the midterm elections, a recent Reuters/Ipsos poll found that 78% of Americans blame Trump’s policies for pushing up prices.