Inflation is the rate at which prices for goods and services rise over time, reducing the purchasing power of your money. In simple terms: when inflation goes up, your dollar doesn’t stretch as far. When prices rise too quickly — or stay too high for too long — it can strain households, businesses, and the economy overall.
Inflation can happen for many reasons, such as:
Higher production costs (like raw materials or wages)
Increased consumer demand
Supply chain disruptions
Government policies (like taxes or tariffs)
Trump’s Policies and Inflation
Despite promising to “eliminate” inflation, most economists agree that Donald Trump’s second-term policies will do the opposite.
Tariffs Raise Prices: Trump is now proposing a universal 10% tariff on all imports, with even steeper rates on goods from China. This would represent one of the largest across-the-board tax hikes on imported goods in modern U.S. history. Economists say these costs will almost certainly be passed directly to consumers, raising prices on everyday essentials — from groceries and clothing to electronics, appliances, and vehicles. Even American-made products could become more expensive, since many rely on imported parts.
Labor Shortages = Higher Wages = Higher Prices: Trump’s plan to deport millions of undocumented workers will shrink the U.S. labor force, especially in industries like agriculture, construction, and hospitality. Fewer workers mean higher labor costs — which again lead to higher prices.
Expert Warnings:
Sixteen Nobel Prize-winning economists cautioned that Trump’s agenda would “reignite inflation”, reversing the hard-won decline from the 9% peak in 2022
- The nonpartisan Peterson Institute for International Economics (PIIE) projects that by Trump’s second term midpoint, inflation could spike back to ~6–9%. In other words, the U.S. could re-experience multi-decade high inflation levels.
- Penn Wharton Budget Model analysts confirm “there’s no question that tariffs are inflationary.”
- Capital Economics projects that consumer price index growth could rise from its current level of 2.4% to approximately double the Federal Reserve’s target rate by summer.