President Donald Trump Claims, "We Don't Have Inflation, and Tariffs Don't Cause Inflation," but a New Report Strongly Disagrees
Statistically, tariffs have not benefited consumers.
During his presidency, President Donald Trump downplayed the issue of inflation, claiming that the U.S. economy and consumers were not affected by it. He also stated that tariffs do not cause inflation, but rather bring wealth. However, a recent report from the New York Federal Reserve disputes Trump's claims. The researchers found that tariffs contributed 2.9 percentage points to goods price inflation by February 2026, and without them, consumer prices would have slightly fallen.
A 10% increase in tariff rates results in a 2.6% rise in consumer goods prices after one year, with two-thirds of the increase coming from pricier imports and the remaining third from domestically produced goods. The higher production costs are then passed on to consumers, contributing to inflation. Additionally, the ongoing Iran war has exacerbated inflation through energy supply disruptions and increased transportation and shipping costs.
This "Trumpflation" has become a broad-based economic issue, with sticky core inflation persisting, affecting various sectors such as fuel, gasoline, utilities, electricity, food prices, apparel, shelter, transportation, medical care, new cars, and used cars.
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