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Trump Promised to End Inflation. He’s Bringing It Back Instead.

July 15, 2025
in News
Trump Promised to End Inflation. He’s Bringing It Back Instead.
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Donald Trump was elected president because he said he would end inflation. In exit polls, 76 percent of Trump voters reported that inflation caused them “severe hardship” over the previous year, and according to an Associated Press post-election survey, voters who judged inflation the most important issue were twice as likely to support Trump. “Starting on day one,” Trump promised, “we will end inflation and make America affordable again, to bring down the prices of all goods.”

Inflation did come down for a few months after Trump entered office, from 3 percent in January to 2.3 percent in April. Since then, however, it’s been rising, and on Tuesday the Bureau of Labor Statistics reported that in June the Consumer Price Index was back up to 2.7 percent, which is where it stood on Election Day. More alarmingly, inflation rose three times faster in June than it did in May, and the consensus among economic experts is that Trump’s tariffs are the reason.

If you voted for Trump because you thought inflation was out of control, you should feel very foolish. Start with the fact that by the fall of 2024 inflation had been falling for two years. “Consumer Prices LOW” Trump wrote Tuesday on Truth Social. He wasn’t wrong. An inflation rate of 2.7 percent isn’t much to worry about. But if it isn’t much to worry about in July 2025, then neither was it much to worry about in November 2024.

Am I saying not to worry about inflation? On the contrary. I think inflation will continue to rise. If June’s report reflects the inflationary effect of Trump’s tariffs, those tariffs don’t seem to be going away, not even after the United States Court of International Trade ruled most of them illegal and ordered them halted. An appeals court reinstated them pending its review (oral arguments begin July 31), and the Supreme Court declined to expedite the case on the unspoken grounds that this would interfere with summer vacation plans, the ethics of whose funding is, under the high court’s new ethics code, none of your goddamned business.

The only uncertainty about how much inflation Trump’s tariff policy will create going forward is that we don’t know what Trump’s tariff policy will be from one day to the next. The stock market has evidently decided not to worry because, as investors see it, Trump is constantly threatening tariffs against individual nations and then chickening out. But Trump is also constantly threatening tariffs against individual nations and not chickening out. You can go crazy trying to keep track of which tariffs are on right now and which are off, but mere threats raise prices, too, as foreign nations put exports on hold while the roulette wheel spins.

Bloomberg has a handy tracker that’s color-coded for whether the given tariff is “imposed,” “announced,” “threatened,” “paused,” or “removed.” Currently in effect are a 10 percent universal tariff on all imported goods; a 25 percent tariff on all imported steel and aluminum; a 10 percent tariff rate on all Chinese goods; and a 10 to 25 percent tariff on all goods from Canada and Mexico, excepting those covered by the United States-Mexico-Canada agreement, which Trump negotiated during his first term. The USMCA carveout exempts most Mexican and Canadian imports; it’s not yet clear whether newly announced 5-10 percent tariffs against those countries set to take effect August 1 will continue to respect Trump’s own trade deal.

The emphasis on China (which is a trade offender) and Canada and Mexico (which are not) supports my view that Trump’s tariff fixation is entirely about exercising unitary power of the purse in a futile (and unconstitutional) attempt to replace the $4.5 trillion in revenue that he just pissed away in the tax bill. These three nations are America’s top trading partners, so, in theory, squeezing them ought to raise the most money. But the problem when you slap tariffs on America’s top trading partners is that you maximize their inflationary effect on American consumers. According to the Yale Budget Lab, Americans are right now paying an effective tariff rate of 18.7 percent, which is the highest since 1933.

Trump’s economic advisers, and especially those who want to replace Jerome Powell at the Fed, refuse to acknowledge this new evidence that Trump’s tariffs are inflationary. “I wouldn’t put too much emphasis on one number,” Treasury Secretary Scott Bessent said on CNBC the night before the CPI was announced. (Bessent claimed he had access to the number but didn’t look.) More boldly, Kevin Hassett, director of the National Economic Council, who also appeared on CNBC the night before the CPI was announced, argued, on the basis of a report by the White House Council of Economic Advisers, that “import prices … are dropping.” His reasoning was dubious:

Americans, because of President Trump’s leadership, have recognized that when they buy an American product, they not only get perhaps a better product—certainly a better product most of the time—but they’re also making their community stronger. And so, there’s, I think, a lot of patriotism in the data.

Following Hassett’s logic, in June—on the very eve of our nation’s 249th birthday!—Americans took an abruptly unpatriotic turn. I have no difficulty attributing that to President Trump’s leadership.

As I say, 2.7 percent inflation is nothing to panic about. But it may be enough to dissuade the Fed from lowering interest rates next month. That, in turn, would strengthen Trump’s resolve to remove Jerome Powell from office based on White House budget director Russell Vought’s trumped-up “for cause” grounds that the Fed’s renovation plans are too pricey. Bessent suggested Tuesday that Powell won’t be fired, but rather won’t be re-appointed when his term ends in May. But that isn’t Bessent’s decision to make.

The leading candidates to replace Powell (Hassett; Bessent; former Fed governor Kevin Warsh; current Fed governor Christopher Waller; and current Fed vice chair Michelle Bowman) are advertising, to varying degrees, their eagerness to set interest rates wherever the president wishes them, and the president wishes them to be low. That will mean more inflation.

Meanwhile, the Bureau of Labor Statistics, which has already suffered cuts to data collection under Trump, won’t endear itself to this administration if it continues to report rising inflation. Even before Trump took office a report by the American Statistical Association said the government’s collection of economic statistics was underfunded and insufficiently shielded from political pressure. BLS has lost 18 percent of its purchasing power since 2009, and more than one-quarter of its aging workforce is eligible for retirement. Last winter DOGE conducted some sort of audit of BLS, which might conceivably be used in the future to exact retribution. I absolutely wouldn’t put it past Trump. Rigging the numbers to disguise inflation would of course be dishonest, and possibly illegal. It would also be very, very inflationary.

The post Trump Promised to End Inflation. He’s Bringing It Back Instead. appeared first on New Republic.

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