WASHINGTON (AP) — Donald Trump is promising that if he is re-elected to the White House, he will eliminate inflation completely, despite the recent rise in consumer prices over the past 3 1/2 years. However, mainstream economists argue that Trump’s policy proposals would actually worsen inflation. They caution that his plans to impose high tariffs on imported goods, deport migrant workers, and interfere with the Federal Reserve’s interest rate decisions could lead to a surge in prices.
Sixteen Nobel Prize-winning economists signed a letter in June expressing concerns that Trump’s proposals could reignite inflation, which has decreased since peaking at 9.1% in 2022 and is now close to the Fed’s 2% target. Additionally, the Peterson Institute for International Economics predicted that Trump’s policies would significantly increase consumer prices if implemented in his second term.
Many economists also question Vice President Kamala Harris’ economic agenda, particularly her plan to combat price gouging. They do not believe her policies would have a major impact on inflation compared to Trump’s proposals.
Consumers end up paying for tariffs
Trump’s primary economic policy is tariffs on imports, which he argues protect American jobs. However, economists point out that the cost of tariffs is ultimately borne by U.S. importers, who pass on these costs to consumers through higher prices. Tariffs can also reduce competition from foreign products, allowing U.S. producers to raise prices.
With Trump’s proposed tariffs, households could face a significant increase in costs. Additionally, limiting food imports as suggested by Trump could further escalate grocery prices, given that a large portion of food consumed in the U.S. is imported.
Trump Would Reverse an Immigration Surge That Helped Ease Inflation
Trump’s mass deportation plans could lead to a higher inflation rate due to the removal of millions of undocumented immigrant workers. Economists note that immigrants have helped supply workers, preventing overheating of the economy and inflationary pressures.
A politicized Fed would make inflation-fighting harder
Trump’s desire to influence the Federal Reserve’s interest rate decisions could pose a challenge to controlling inflation. Economists emphasize the importance of the Fed’s independence in managing inflation effectively.
In conclusion, while Trump promises to address inflation by his policies, economists warn that his proposals could have the opposite effect, leading to higher prices for American consumers.
