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\n Didn\u2019t Donald Trump promise everyone lower prices?
\n Photo: Spencer Platt\/Getty Images\n <\/p>\n
One of the big ongoing debates this year in both economic and political circles has been whether, when, and how rapidly Donald Trump<\/a>\u2019s policies, and particularly his tariff program, would boost consumer prices, subjecting him to the same inflation peril that Joe Biden experienced. For months after Trump\u2019s initial \u201cLiberation Day\u201d tariffs announcements<\/a>, experts tried to explain why inflation statistics were still low. Not many actual economists bought Trump\u2019s own argument that foreign producers and American importers would just pay tariffs out of their own pockets and leave consumers alone. But there have been other explanations, ranging from the wildly gyrating on-again, off-again nature of Trump\u2019s decisions on tariffs, to built-up pre-Liberation Day inventories, to partial validation of the MAGA theory that importers value American markets too much to let Americans fully feel the pain.<\/p>\n However, now there are signs the long-awaited inflationary wave may finally be landing on our shores, as The Bulwark\u2019s Andrew Egger observes<\/a>:<\/p>\n [An] alarm-bell price report [arrived] yesterday: a 0.9 percent single-month jump in the Producer Price Index, the largest since the bad old inflation days of 2022. That jump pushed PPI 3.3 percent higher compared to this time last year, while \u201ccore\u201d PPI\u2014which excludes more naturally fluctuating prices of food and energy\u2014rose all the way to 3.7 percent year-over-year.<\/p>\n In contrast with the Consumer Price Index, which tracks the cost of final goods, PPI tracks costs through every step of the supply chain, including raw material inputs and intermediary manufacturing. PPI and CPI are closely related measures, of course, and ordinarily they track closely together. But the fact that PPI is spiking ahead of CPI right now suggests that economists\u2019 warnings about the costs of tariffs were right. What we\u2019re seeing is tariff-induced upward price pressure on every step in America\u2019s globally integrated supply chains, all while businesses use every trick in the book to delay passing those costs on to consumers. But delay is all they\u00a0can\u00a0do; soon, consumers will be feeling the burn too.<\/p>\n If that\u2019s correct, or even half correct, there\u2019s another important mystery to unravel. Polling data has shown Trump getting consistently poor job-approval ratings for his handling of \u201cinflation\u201d and \u201cprices.\u201d According to Silver Bulletin\u2019s polling averages<\/a>, Trump\u2019s net approval rating on inflation is a horrendous minus 25.5 percent, and it\u2019s been below minus 20 percent since mid-June. Does this reflect anticipatory fears of the inflation we are now beginning to see? If so, it\u2019s possible such inflation has already been baked into assessments of Trump\u2019s job performance, and its actual appearance may not significantly erode his support, assuming it\u2019s limited in size.<\/p>\n But there\u2019s another possibility that could mean big trouble for Trump and his party heading toward the 2026 midterm elections, and Egger notes it as well:<\/p>\n It\u2019s remarkable to ponder the gap between this economic picture and what voters\u00a0thought\u00a0they\u2019d be getting with Trump on inflation. Many Americans seem simply to have swallowed his incredibly simplistic campaign pitch of \u201cBiden makes prices go up, Trump will make prices go down.\u201d The fact that they\u2019ve kept going up even modestly so far this year has scanned as a disappointment to many. How they\u2019ll respond to Trump\u00a0actively making that inflation worse\u00a0in the weeks and months ahead remains to be seen, but support for his ability to handle the economy only continues to soften.\u00a0<\/p>\n Those who focus on inflation statistics may be missing that, which also helps explain why improved inflation numbers<\/a> didn\u2019t help Biden<\/a> in the last two years of his presidency: Americans didn\u2019t want prices to rise more slowly, but to actually go back down to where they were before their post-pandemic spike. The fact that general price drops don\u2019t tend to happen without a recession may seem axiomatic to economists, but not to voters being sold a bill of good by Trump. Before long, he may pay dearly in political capital for that particular bit of deception.<\/p>\n