Donald Trump has declared the US affordability crisis over, blaming high prices on the “dirty, rotten” lies of Democrats and claiming prices are “plummeting downward”. However, polls and economic data continue to show that American households remain under significant financial strain, despite the president’s assurances.
Inflation unexpectedly eased to 2.4% in January, down from 2.7% the previous year, but this falls short of Trump’s campaign promise to bring down prices on “day one”. A December 2024 interview revealed Trump’s own admission that it is “very hard to bring things down once they’re up”. Polls indicate that many of his own voters now blame him for the high cost of living.
Trump’s tariff policies, while less inflationary than some feared, are widely unpopular. A February New York Federal Reserve report found that US consumers bear the bulk of the economic burden, with up to 90% of tariff costs hitting domestic firms and households. The average tariff rate on US imports has risen from 2.6% to 13%.
Corporate earnings calls confirm the trend: companies including Levi’s, Rubbermaid, BMW and Nike plan to raise prices in 2026, citing tariffs. A Harvard Business School price tracker shows flooring up 66%, clothing up 18% and home repair goods up 10% compared to pre-tariff levels. The Kiel Institute estimates that only 4% of tariff costs are borne by European exporters, with US consumers and importers absorbing 96%.
Beyond tariffs, experts point to a knot of issues including rising utility bills, healthcare premiums, supply chain complications and geopolitical turmoil. Broad uncertainty also allows firms to raise prices more than necessary, echoing patterns seen during Covid-era inflation. As one economist put it, “It’s all bad and we’ve been in this knot for a long time.”
