Former President Joe Biden was roasted by economists in December 2023 over incoherent claims he made while getting blamed for high prices, which had sent his poll numbers plummeting. Nearly two years later, prices are rising again, but this time it’s President Donald Trump who is trotting out the bogus claims.
In a recent interview with Fox News host Laura Ingraham, Trump kept insisting costs are down, not up. Trump is right that prices have fallen for some goods, including staples such as gasoline. But people who’ve seen sharp price increases in goods such as coffee, beef, and fruit might be skeptical that “costs are way down,” and they’d be right.
The annual inflation rate eclipsed 3% in September, according to the consumer price index. That’s a full 50% above the Federal Reserve’s 2% target. Trump defenders might argue that 3% inflation is still far better than the Biden years, when inflation peaked at 9% in June 2022. There are two problems with this thinking.
First, Trump repeatedly promised that he’d stop inflation on “day one” if elected. But politicians often make boasts they cannot fulfill. The bigger problem is that inflation, which had been declining when Trump took office, has been rising steadily the last six months.
After Trump took office in January, inflation cooled for three straight months until it hit 2.33% in April, the lowest rate in more than four years. After April, prices began to rise steadily again.
This complicates Treasury Secretary Scott Bessent’s claims that “we inherited this affordability mess.” And it lends credence to those who say Trump’s policies are directly to blame.
For months, Trump defenders, including Bessent and Stephen Miran, had been saying economists were all wrong that the president’s tariffs would be inflationary.
“There just still continues to be no evidence whatsoever of any tariff-induced inflation,” said Miran, who became a member of the Federal Reserve Board of Governors in September.
The data today paint a different picture, and one that is not flattering to Trump’s “Liberation Day” tariffs, announced in April.
Inflation is primarily a monetary phenomenon, but tariffs can raise inflation. And with every month, it has become clearer that the president’s trade policies are driving up prices.
To his credit, even Bessent acknowledges this. In a recent interview with Fox News, the treasury secretary said the White House would be rescinding tariffs on many imports, including coffee, bananas, and other fruits.
“That will bring the prices down very quickly,” Bessent said.
That’s good news, but it invites an important question: Why was the U.S. slapping protective tariffs on these foods in the first place? As Bessent admitted, there’s not exactly a coffee or banana industry in the U.S. that these tariffs are protecting.
The admission reveals that Trump’s tariff strategy has been not just economically harmful but also fundamentally incoherent. Imposing taxes on goods that America doesn’t even produce raises costs for consumers without delivering any of the supposed benefits of “protecting” native workers.
Still, at least Bessent acknowledged that tariffs are driving up prices, something Trump seems unable to accomplish. The White House’s political strategy appears to be little more than blaming Biden for an inflation crisis that should have been over by now. Instead, the Federal Reserve finds itself cutting interest rates even as inflation rises and remains well above the Fed’s 2% target.
To make matters worse, the president is reportedly considering a national tour to convince people that the squeeze they are feeling is imaginary (“a con job by the Democrats,” in his words). This would be a foolish move. Trying to gaslight voters about their own grocery bills would be disastrous — for Trump, for Republicans, and for the public.
It would be economic denialism akin to that of Biden, who insisted for years that everything was fine and that he was leaving people a “stronger than ever” economy. Many partisans bought Biden’s claims, but voters did not. Today, Republicans find themselves in a similar position.
TRUMP ADMINISTRATION PLANS TO EASE FOOD TARIFFS IN AFFORDABILITY PUSH
Unlike Biden, Trump still has time to right the economic ship. But that requires acknowledging his trade policies have done serious harm. (Trump might get an assist from the Supreme Court, which would make him the luckiest president in U.S. history.)
For now, Americans are stuck with higher prices and a sluggish economy. And with Trump’s approval rating on the economy at -34, few seem willing to buy the White House’s spin that it’s all in our heads.
Jon Miltimore is senior editor at the American Institute for Economic Research. Follow him on Substack.
