Donald Trump promised to make life cheaper and “end inflation.” But months of trade wars and his attack on Iran have done the opposite, making America more expensive.
Inflation rose to a two-year high in March and consumer confidence has plummeted as Americans brace for further price rises. According to economists, the Federal Reserve has no room to cut interest rates on Wednesday, which means that mortgage and corporate rates will also remain high.
Prices are not rising as quickly as during the Joe Biden years. But voters are unimpressed by Trump’s progress.
According to a polling average from Real Clear Politics, the president’s approval rating has fallen to just 40 percent, his lowest mark yet. A recent Fox News poll found that seven in 10 people thought the economy was worsening, up from 55 percent a year ago.
“As James Carville would say, ‘it’s the economy, stupid.’ Nothing else matters,” said Paasha Mahdavi, a political science professor at the University of California, Santa Barbara, quoting Bill Clinton’s famed election strategist.
“It’s what we call ‘pocketbook voting’,” he added. “All of these factors are working against the president right now.”
White House spokesman Kush Desai said Trump has implemented a series of measures to address higher prices “from tax cuts and deregulation that ease the burden on the economy as a whole to micro-targeted interventions in household essentials like eggs, prescription drugs and beef.”
“President Trump has promised to restore prosperity to America’s working class, and the Trump administration has aggressively sought to deliver on this with a whole-of-government approach,” Desai said.
Energy and fuel
Trump promised during his campaign that he would unleash American drills to extract the country’s “liquid gold” and drive gasoline prices below $2 a gallon.
But its war with Iran has done the opposite, triggering a global energy shock that has sent fuel costs soaring across the US.
Tehran’s closure of the Strait of Hormuz, through which a fifth of the world’s oil supplies flow, and the US blockade of the waterway had pushed US crude prices up to more than $96 a barrel on Monday evening. That’s a jump of 44 percent since before the war.
The result? Americans pay an average of $4.11 per gallon for their gasoline, compared to $2.98 before the war, according to auto group AAA.
Trump is now suffering Biden’s shame: pumping stickers of the president onto the forecourt next to the prize that read: “I did that!”
“That was the real challenge for the government because [petrol] is a very visible price,” said Mahdavi. “In fact, it is the most visible commodity in the economy. There’s nothing else like it. . . in sight for the consumer, as prices can literally be found everywhere.”
To keep the price down, the government has released oil from the Strategic Petroleum Reserve, ordered U.S. shale producers to pump more and offered shipowners risk insurance to navigate the strait.
But it remains closed. Goldman Sachs warned this week that crude oil prices could reach nearly $120 later this year.
The price of diesel fuel, a lifeline of the U.S. economy, has risen 45 percent to $5.45 a gallon. Economists warn this will ripple through the economy for months as critical inputs for trucking and agriculture push up the prices of other goods.
Rising jet fuel prices — up about half since the war began, to $3.61 a gallon — have driven up the cost of airline tickets, which were 15 percent more expensive in March than a year earlier, according to the Bureau of Labor Statistics.
Chevron CEO Mike Wirth said airfare inflation is just beginning. “I think aviation is clearly an area where things are likely to get worse in the coming weeks,” he told CBS on Sunday.
Consumer goods
Even before Trump’s Iran conflict, his trade wars were already driving up the costs of many imported goods — especially consumer products.
In early April—a year after “liberation day,” when Trump launched a global trade war—Yale’s Budget Lab estimates that the U.S. effective tariff rate stood at 11 percent, the highest level since 1943, excluding 2025.
The government argues that foreign exporters will “eat up” the tariffs to do business with the US. Research shows that the tariffs are swallowed by American companies and consumers.
Inflation has spread to goods such as toys, which are often imported. Trump’s response last year was to suggest that children didn’t need “30 dolls” when “three or four” would suffice.
Analyzes from Yale’s Budget Lab show that Trump’s tariffs added between 0.5 and 0.7 percentage points to annual inflation in March.
They estimate that the duties will increase the cost of motor vehicles by 4.2 percent, clothing and footwear by 3.6 percent, and furniture and durable home appliances by 1.6 percent, before the effects of substitution as consumers and businesses switch to other products.
“Over the past year, tariffs have raised the prices that ordinary Americans face,” said John Iselin, associate director of economic analysis at the Budget Lab. “[And] we really don’t know how much more prices will rise in the future.”
Economists warn that the tariffs and the war could combine to keep inflation high for longer. That meant the Fed had to be “more vigilant” with monetary policy, Governor Chris Waller, who had previously called for rate cuts, said this month.
“This is because if the shocks hit one after another, they will keep inflation high for quite some time.”
Food
Standing in front of a table of groceries in New Jersey in August 2024, Trump spoke for many Americans: “grocery prices have skyrocketed.” But he would topple them “immediately” if the country sent him back to the White House.
In March, food prices were 2.9 percent higher than a year earlier. Americans are still grumbling.
The top figure also masks extreme changes: for example, coffee and tomatoes have skyrocketed while the price of eggs has plummeted. The White House has also halted a rise in beef prices by easing tariffs on Argentine beef – angering domestic suppliers.
Further food inflation is now likely, economists say, as a result of the war in Iran, as higher energy and fertilizer costs put pressure on farmers already under pressure from retaliation from China and other buyers.
The price of nitrogen fertilizer, which typically waits three to six months before hitting grocery store shelves, has risen more than 30 percent since late February, according to the American Farm Bureau Federation. Urea, another crucial raw material, has increased by almost 50 percent.
Housing and electricity
According to the BLS, housing costs rose 3 percent in the 12 months through March as rates and the government’s crackdown on migration pushed up prices.
The White House has relaxed regulations to boost supply, bought bonds to keep mortgage rates down and restricted investor ownership of private homes.
But mortgage rates remain above 6 percent, which is unaffordable for many younger buyers. That’s made worse as older Americans remain reluctant to move and lose their cheaper rates.
Tariffs have driven up the cost of building materials, including lumber, plaster, steel and copper. The National Association of Home Builders estimated that last year about 7 percent of all goods used in new home construction came from abroad.
Brookings estimates that the tariffs will add about $30 billion to home construction costs, especially for new homes.
The crackdown on immigration has reduced the labor supply and also increased the costs of construction groups.
The cost of electricity, which Trump promised to halve, has also fallen since he returned to power as supply struggles to keep up with rising demand, including from data centers. A counter-reaction arises.
The president’s war on renewable energy has led to the cancellation of some new power projects and more than $83 billion in Biden-era loans for others.
Inflation has cooled slightly from its 2025 peak after the government pushed tech companies to build their own generation and cut more regulation. But prices continue to rise at a much faster pace than when Trump took office.
