Donald Trump campaigned for his second term two years ago pledging to reduce prices immediately upon his return to the White House, but instead his major policy decisions have increased inflation rather than fought it. According to a Reuters/Ipsos poll, 78% of Americans blame Trump's policies for pushing up prices. More than one in five Americans who voted for Trump now disapprove of his job performance.
Trump promised during his campaign to slash energy and electricity prices by half, get gasoline below $2 a gallon, and bring down airfares and housing costs. None of these pledges have materialised. Gas now averages $4.28 a gallon nationally, according to AAA. The Yale Budget Lab estimates Trump's tariffs will cost the average household $1,100 this year, while Moody's Analytics says the war with Iran has already cost US households about $2,000 from higher energy, fuel and transportation costs and higher interest rates. A Fox News poll this month found that 77% of Americans disapprove of how Trump has handled tariffs. Since the war with Iran began eight months ago, US gas prices have risen by over 40%, diesel prices by nearly 70%, and some fertilizer prices by 20%.
Trump's tariff policies have repeatedly pushed up prices despite economists warning they would be inflationary. The "liberation day" tariffs he imposed soon after returning to office increased the price of hundreds of goods including citrus fruits, steel, bananas, beef and auto parts. When the supreme court overturned those tariffs as illegal, Trump immediately imposed new 10% across-the-board tariffs. He has also ended federal subsidies for low-cost renewable energy, raising electricity prices, and ended electric vehicle subsidies, costing consumers $7,500 per vehicle. His datacenter policies are expected to increase electricity costs to consumers by more than $6bn.
Prices have risen faster than workers' wages in recent months. Both average hourly pay and prices have risen by 5.4% since January 2025, meaning Americans have seen no real wage growth on average since Trump returned to office. By the time Biden left office, inflation had fallen to 3.0%, but Trump's policies have pushed it back up to 3.7%, causing the Federal Reserve to raise interest rates. Thirty-year fixed mortgage rates have climbed to 7.4%. Trump's policies have also increased healthcare costs, with Americans who pay for their own health insurance seeing premiums jump by 25% this year.
A White House spokesman defended Trump's record, saying he had "implemented an aggressive, pro-growth economic agenda that has blunted Biden's historic 40-year high inflation crisis." The spokesman added that Trump had cut prescription drug costs, signed the largest working-class tax cuts in history and added more than one million private-sector jobs. Trump has taken minor steps to fight inflation through his TrumpRX program, which helped contribute to a 4.5% drop in prescription drug prices over the past year. In August, Trump announced he would import 660 million pounds of ground beef from Latin America to reduce beef prices.
Higher prices mean savers see their money buy less, borrowers pay more in interest on mortgages and loans, and businesses struggle with rising costs while workers fail to see real wage increases. Trump is proposing to pay $5,000 to every adult if Republicans retain control of Congress, saying the money could come from tariff revenues, though those revenues ultimately come from money that US consumers have paid on imported goods through tariffs.