President Donald Trump Claims, "Tariffs Don't Cause Inflation, They Cause Wealth" -- but Economic Data Says Otherwise

President Donald Trump has been a proponent of tariffs, claiming that they don't cause inflation but instead generate wealth. However, economic data suggests a different story. During Trump's second term, tariffs have been a major talking point and contributed significantly to the U.S. tariff revenue. The Bipartisan Policy Center reported that gross tariff and excise revenue collected reached $264 billion in 2026, up from $227 billion in 2025 and more than three times $82 billion in 2024.

While tariffs may have encouraged foreign companies to manufacture in the U.S., revived U.S. manufacturing, and made U.S. goods more competitive, they have also raised consumer prices and negatively impacted the U.S. economy. According to a New York Federal Reserve economists report, tariffs contributed 2.9 percentage points to goods price inflation by February 2026. This means that if the tariffs hadn't been imposed, prices would have actually declined.

The report noted three factors that drove up prices: tariff rates, pricier imports, and U.S. made goods with higher input costs due to tariffs. It took 6-12 months for the increase in U.S. made goods prices to filter through. The negative consequences of Trump's tariffs, including the impact on the stock market and affected companies, also align with the economic data, despite Trump's claim that tariffs cause wealth.