Trump's affordability plan has unraveled
Inflation is spiking, yet Trump still plans new tariffs that will raise costs even more
It’s obvious by now that President Trump’s campaign promise to bring prices down was a cruel joke.
If Trump had taken office in 2025 and gone into deep hibernation, we’d probably have inflation back to the normal range of 2% or so, with lower interest rates and steady growth. Instead, we have a renewed spurt of inflation, gasoline prices above $4 per gallon, rising interest rates and deep uncertainty over the health of the economy.
Inflation jumped from 3.8% in April to 4.2% in May, as the effects of the energy shortage caused by Trump’s Iran war spread throughout the economy. Gasoline prices are 41% higher than a year ago, driven entirely by the Iran war. Before Trump launched the war on February 28, there was abundant oil in global markets and gas prices were below $3 per gallon on average.
Higher energy costs show up most prominently in gasoline prices posted at every filling station in the country, but they also creep into the prices of many other things through higher production and transportation costs. Airfares are up 27% because of higher fuel costs. Household energy costs are up 6.4%. Clothing prices used to be tame, but they’ve suddenly jumped nearly 5%, the biggest increase since 2022.
Grocery prices are rising at a modest 2.7%, but could spike as the higher cost of production, shipment and fertilizer caused by the Iran war moves through supply chains. All these price increases come as Americans are thoroughly fed up with costs that have gone up and stayed up during the last five years.
Inflation is now outpacing wages, which means real income growth is negative and the typical worker is falling behind. The last time this happened, in 2023, President Joe Biden watched his approval ratings collapse, never to recover.
You might think Trump would try to do something about all this. He is—by making it worse.
Trump’s promises to lower prices were always disingenuous, because he vowed to impose new tariffs at the same time. Tariffs are taxes on imports that raise prices, pure and simple. American importers pay the tax to the government and try to recoup as much of it as possible by passing the cost increase along to buyers.
[Everybody calm down about Elon Musk’s SpaceX IPO]
Courts have struck down Trump’s most draconian tariffs, but he is undeterred. His administration is preparing to roll out new tariffs to replace the ones courts have invalidated, and these are likely to have better legal standing. That means they’ll probably stick.
Overall, Trump has raised the average import tax from 2.5% to about 10%. The new tariffs could push that to 15% or so.
Meanwhile, the core element of Trump’s 2026 affordability plan was supposed to be the tax cuts he signed into law last year. But Moody’s Analytics says the higher cost of energy and other things caused by the Iran war now exceeds the average tax savings from the tax law. As usual, the burden of higher costs hits lower earners the hardest.
Trump’s approval rating is going the way of Biden’s. His net approval rating, which is the portion who approve minus the portion who disapprove, is -25, according to YouGov. That’s lower than Biden’s net approval ever got. Trump’s marks for handling inflation have collapsed, from +6 net approval when he took office in 2025 to -44 now.
What that means is that voters generally believed Trump when he said he would get prices down. But when it came time to convert words into action, Trump did the opposite of what he promised, pushing prices up. The data shows it and voters, not surprisingly, are pissed.
[Trump has a Joe Biden problem on jobs]
If there’s any good news, it’s that May inflation was about what markets expected, so it didn’t induce any sharp moves on its own. Some economists think inflation may be close to a peak for the year. And there’s always the possibility the Iran war will end and the oil will start flowing again, even though Trump’s perpetual promise of an imminent deal has become a running joke.
The lesson of the Biden years, however, is that inflation stings long after the data shows that it’s subsiding. Trump has burned voters, and he may never get them back.
Enjoy a cartooon.
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