President Donald Trump
In January, inflation rose three percent from a year earlier, the Bureau of Labor Statistics announced on Wednesday, making for the biggest one-month increase since August 2023 and a warning sign for President Donald Trump.
Last month’s inflation was higher than economists expected, with the cost of shelter, food, and gasoline driving the price increases. In fact, the BLS said that the price of eggs alone rose 15.2 percent in January, amounting to “the largest increase in the eggs index since June 2015.”
Inflation rose even though Trump promised he would lower costs “immediately” upon taking the White House, saying at the Republican National Convention in July, "I will end the devastating inflation crisis immediately, bring down interest rates, and lower the cost of energy—we will drill, baby, drill. … But by doing that, we will lead a large-scale decline in prices."
It was an absurd promise to make in the first place, but it’s one that experts say will age poorly. The ten percent tariff that Trump is imposing on China—as well as the 25 percent tariffs currently on pause for Mexico and Canada)—and the new 25 percent tariffs on steel and aluminum imports are expected to exacerbate price increases.
“This is a warning for President Trump and his team as they ready hefty tariffs,” Washington Post economics columnist Heather Long wrote in a post on X. “Americans remain very sensitive to price increases. When Trump launched his last trade war in 2018, inflation was 2 %. Now the starting point is 3%.”
Industries that rely on steel and aluminum are increasing their prices.
Nucor, a major U.S. steel producer, sent a letter to its customers on Monday saying they are increasing prices on all steel rebar prices by $40 per ton due to the "significant rise in input costs" caused by Trump's tariffs.
Meanwhile, the CEO of Ford said at a Tuesday investor's conference that Trump's tariffs will be "devastating" for the auto industry, leading to possible layoffs.
"Let's be real honest: Long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we've never seen," CEO Jim Farley said, according to the Detroit Free Press. "Frankly, it gives free rein to South Korean, Japanese and European companies that are bringing 1.5 million to 2 million vehicles into the U.S. that wouldn't be subject to those Mexican and Canadian tariffs. It would be one of the biggest windfalls for those companies ever."
Ford donated $1 million to Trump’s inaugural fund.
Bharat Ramamurti, an economist who served as the deputy director of the National Economic Council under former President Joe Biden, said the fact that inflation is accelerating under Trump is a bad sign for his presidency.
“Inflation reaccelerating. Consumer confidence plunging. Trump approval rating historically low for a presidential honeymoon period. Legislative efforts still stuck in neutral. For all the bluster, the new admin is off to a brutal start,” Ramamurti wrote in a post on X.
Trump, of course, is taking no responsibility for the rise in inflation in January.
"BIDEN INFLATION UP!" Trump wrote in an all-caps rage-post on his Truth Social platform.
Meanwhile, The New York Timesreported that Trump’s administration is starting to temper expectations about their ability to lower prices.
And that could spell trouble for his approval rating. In a recent YouGov poll for CBS News, 66 percent of Americans said Trump isn’t focused enough on lowering prices.
Reprinted with permission from Daily Kos.
