The New York Federal Reserve released a research report the other day that included some pretty significant findings on the effect of President Trump’s tariffs on American consumers. The most notable among them was that the inflation we’ve seen on many everyday items, since the beginning of the trade war, has been entirely due to the tariffs.
Not partially, but entirely. Without the tariffs, those items (which included 67 categories of products) would have actually lowered in price to below their prior levels. Instead they saw an inflationary increase of 2.9%.
The study covered economic activity from February of 2025 (when the first tariffs of Trump’s second term were applied) to February of 2026, when the Supreme Court determined the unconstitutionally of Trump’s IEEPA tariffs (the continued effects of which are expected to last until early 2027). It did not include Trump’s latest round of tariffs against Canada (which are further increasing costs for American consumers), nor does it include inflation attributable to ongoing Iran War.
“The New York Fed’s report offers the clearest evidence yet of the impact of Trump’s tariffs — a core policy of his most recent campaign and second term in the White House — on consumers’ wallets,” reported CNBC’s Alex Harring. “Economists had widely expected his levies to push up prices, though the precise effects had been hard to estimate due to the changing nature of the policy and the lack of transparency on how companies set their prices.”
As high as prices have been, one can only imagine how much worse things would be right now (and in the future) if Trump hadn’t been pressured by bond markets to repeal his most severe tariffs, and the Supreme Court hadn’t ruled against his abuse of the IEEPA.
Trump, of course, was elected in 2024 largely because of Americans’ frustration with high consumer prices under President Biden (most of which were tied to the global economic recovery from the pandemic). What has become increasingly clear, as supported by this study (and several before it), is that the economic relief voters so desperately hoped for back then would have actually arrived… had it not been for Trump’s unilaterally imposed trade war.
When you consider, also, that the trade war hasn’t lived up to any of Trump’s promises (or even his premises), but has managed to add an enormous amount of money to his personal wealth (while alienating a number of U.S. allies and trade partners), it’s no wonder the president’s approval ratings are as dismal as they are. The same goes for the GOP’s midterm prospects (at least according to the polls).
Sure, the midterms are always a referendum on the party of the sitting president, but despite Trump having sidestepped the U.S. Congress entirely by imposing his tariffs through executive actions, congressional Republicans have dirty hands on the issue. Congress could have stopped the trade war before it ever started, or at any time after it began, simply by reclaiming their rightful tariff authority.
Heck, it could have been taken care of in an afternoon.
Instead, out of crippling fear of displeasing the president, the Republican-led Congress has let it go on and on, with Americans literally paying the price for their cowardice. The GOP has even lost its longtime polling advantage as the party Americans most trust to handle the economy. That’s despite a slew of DSA candidates and other Democratic progressives proudly campaigning on their own economically illiterate ideas.
In other words, the Republicans have only themselves to blame. They should have stuck with their free trade principles.
After the midterms, Trump will reach traditional “lame duck” status. At that point, the best thing the U.S. Congress could do for American consumers, as well as our trade partnerships and global economic standing, would be for the parties to work together to further limit and reclaim the president’s tariff authority. This failed, self-enriching experiment needs to end.
Will that actually happen? I’m not optimistic.
So sad, but so true.