22 March 2025
For the past few presidential elections, “inflation” has been the boogeyman haunting American voters. In the 2024 presidential election, both candidates and media alike directed voters’ attention to rising prices of everyday necessities, making the economy perhaps the most contentious issue on the ballot. In fact, according to a November 2024 CNBC article, an estimated 50% of Americans believed that the result of the 2024 presidential election would directly impact their personal finances [5]. Consequently, Donald J. Trump won a historic second term in office after promising sweeping economic measures including a 200% increase in tariffs imposed on China, and a decrease in inflation supposedly caused by the Biden-Harris administration in the past four years. Voters supported him in droves, noting that they were financially better off in 2016, under Trump’s first term as President. Today, the American people have a new cry for help – lower the price of eggs. An amalgamation of rising prices and scarcity of several essential goods and services, eggs are the new embodiment of frustration in the state of the U.S. economy. During the second Trump administration, the price of eggs continues to rise, and is unlikely to slow down any time soon. This begs the question, how many of the Trump Administration’s economic policies will actually benefit the average American citizen?
On the campaign trail, Trump vowed to impose a slew of tariffs on a range of goods from countries including China, Canada, and Mexico. A tariff, or a tax on foreign-made goods, is paid by the importing foreign business to the home country’s government. Historically, governments have used tariffs as an economic strategy to reduce trade deficit while bolstering domestic industries by reducing reliance on imports [7]. President Trump, however, plans to wield the tariff as a weapon to achieve his political goals. On the campaign trail, candidate Trump weaved a narrative of an America that was being taken advantage of by the rest of the world, and tariffs, along with other extreme protectionist strategies were tools to reclaim the country’s authority on the world stage. As of February 2025, the president has targeted three countries specifically: Canada, Mexico, and China. Regarding Trump’s motivation behind the tariffs, the White House informed the press that the president intended to take “bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country” [3].
However, the economic consequences of these tariffs on domestic buyers, or ordinary American citizens, could be catastrophic. While importers would pay the cost of the tariff to the U.S. government, the burden of this tax actually falls on consumers. Since high tariffs are meant to curb imports and incentivize domestic production, domestic producers have the opportunity to raise their prices. The federal government may pride themselves on seeing more “Made in the USA” stickers being churned out by domestic producers, but chances are those goods are still made up of several imported components. When those imported components are taxed, domestic businesses face higher input costs, making their final product more expensive to the average American consumer. Upon hearing of Trump’s promises to raise tariffs on China on the campaign trail, researchers at the Federal Reserve Bank of Boston estimated that in the short term, “an additional 60 percent tariff on imports from China and an additional 10 percent tariff on imports from the rest of the world, could have contributed as much as an additional 2.2 percentage points to core inflation” [1]. Upon evaluating the Trump administration’s current tariff policy, the researchers found that in the short term, “an additional 25 percent tariff on goods from Canada and Mexico combined with an additional 10 percent tariff on goods from China could add as much as 0.8 percentage point to core (excluding food and energy) inflation” [1]. In other words, high tariffs mean high prices at home.
Even with an economic strategy hyper focused on global trade, Donald J. Trump was still able to convince Americans that he was the most capable candidate to lower the price of their eggs and other everyday necessities. A survey known as the P-Fin Index developed by the TIAA Institute and the Global Financial Literacy Excellence Center estimated that over the past decade, financial literacy rates of U.S. adults have dipped below 50% [6]. The P-Fin Index is based on responses to questions regarding financial topics such as earning, consuming, saving, investing, borrowing/managing debt, and etc [6]. With this alarming statistic in mind, it is no surprise how quickly economic misinformation can turn into fact in the minds of the average American voter. During his presidential campaign, Trump capitalized on the lack of financial literacy among voters as he warned crowds about a future of mass bankruptcies and a second Great Depression if Democratic candidate Kamala Harris was elected to office over him [2]. Although rooted in misinformation, these scare tactics attracted the support of millions of Americans who finally felt validated in their concerns about the economy.
Inflation in particular has been the go-to canvas for politicians to paint the economy as a partisan issue, artfully convincing the American people that their financial problems were a direct result of partisan policies. At a campaign rally in August 2024, then presidential candidate Trump told the crowd that the Biden administration’s “radical liberal policies…caused horrific inflation” [8]. Between December of 2023 and January 2024, Harvard professor Stefanie Stantcheva conducted a survey to study how the average American viewed inflation. She found that in all 1,500 responses, “Inflation generated strong emotions among respondents, from anger to fear about the future, and a sense of inequity” [9]. When respondents were asked who or what they blamed for inflation, 24% of Republicans blamed President Biden as opposed to a 12% of Democrats. Greed received 13% of votes from Democrats and 8% from Republicans, while true factors in inflation such as fiscal and monetary policy, input prices, and demand vs. supply only received 4-9% of votes from both sides [9].
In a poll conducted by the Wall Street Journal, 56% of respondents reported that the economy had gotten worse while only 25% reported that it had gotten better. WSJ wrote, “That is difficult to square with robust employment growth, unemployment near its lowest in half a century, or growth in gross domestic product, which actually accelerated last year” [4]. There is a clear and present disconnect between economic realities and perceptions in America, further perpetuated by the media with eye-catching negative headlines and by fear-mongering politicians. Therefore, when a presidential candidate promises the American people that their costs will go down, they will believe them. A high school level macroeconomics course could reveal the true impact of tariffs on the consumer, but without nationwide requirements for financial and economic literacy, most U.S. adults will not know what a tariff is. American voters rely heavily on the media and politicians to bring them clarity about the state of the economy; However, if they are constantly exposed to misinformation and scare tactics, they will never get that clarity. Tariffs will not lower the price of eggs, and it is time the president is honest with the American people about his plans for the economy.
Image via Pexels Free Photos
Works Cited
[1] Barbiero, Omar and Hillary Stein. “The Impact of Tariffs on Inflation,” Federal Reserve Bank of Boston. February 6, 2025. https://www.bostonfed.org/publications/current-policy-perspectives/2025/the-impact-of-tariffs-on-inflation.
[2] Collinson, Stephen. “Trump plays the fear card on the economy – and it seems to be working,” CNN. Cable News Network, September 24, 2024. https://www.cnn.com/2024/09/24/politics/trump-fear-economy-analysis/index.html.
[3] “Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China,” The White House. February 1, 2025. https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/.
[4] Ip, Greg. “What’s Wrong With the Economy? It’s You, Not the Data,” The Wall Street Journal. Dow Jones & Company, Inc., Last modified April 4, 2024. https://www.wsj.com/economy/consumers/whats-wrong-with-the-economy-its-you-not-the-data-cfa911e6.
[5] Lee, Juhohn. “The president’s influence on the U.S. economy may be greatly exaggerated, according to experts,” CNBC. CNBC LLC, November 7, 2024. https://www.cnbc.com/2024/11/07/heres-how-much-control-the-president-has-over-the-us-economy.html.
[6] Meineke, Michelle. “Can you answer these 3 questions about your finances? The majority of US adults cannot,” World Economic Forum. April 24, 2024. https://www.weforum.org/stories/2024/04/financial-literacy-money-education/.
[7] Siripurapu, Anshu, and Noah Berman. “What Are Tariffs?” Council on Foreign Relations. Last modified February 3, 2025. https://www.cfr.org/backgrounder/what-are-tariffs.
[8] Sonnenfeld, Jeffrey A. and Stephen Henriques. “The Truth Beneath the Economic Misinformation,” Yale Insights. Yale School of Management, September 6, 2024. https://insights.som.yale.edu/insights/the-truth-beneath-the-economic-misinformation.
[9] Stantcheva, Stefanie. “Why do we dislike inflation?” Brookings. The Brookings Institution, March 27, 2024. https://www.brookings.edu/articles/why-do-we-dislike-inflation/.
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