The Inflation Time Bomb—Trump's Policies Will Hit Your Wallet Soon
Advocates for ideas and draws conclusions based on the interpretation of facts and data.
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
With inflation hovering modestly above 2 percent despite President Donald Trump's aggressive tariff increases and immigration enforcement, some might wonder whether warnings about his policies driving up prices were overblown. They weren't. The inflationary pressures are building beneath the surface, masked by timing, supply chain buffers, and massive corporate stockpiling ahead of policy changes. The time bomb is ticking—and consumers should begin bracing for the explosion.
Trump's most disruptive policies didn't begin in earnest until months after his January inauguration. While he announced a 10 percent tariff on Chinese goods in late January, the real escalation came in March when rates jumped to 20 percent, then spiked to 145 percent by April before being partially rolled back. The administration's "Liberation Day" universal tariff on April 2 marked the broadest increase since the 1930s.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on June 18, 2025.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on June 18, 2025.
TIMOTHY A. CLARY/AFP via Getty Images
Immigration enforcement followed a similar pattern. Though raids began in January, the most aggressive workplace operations didn't intensify until late May, when Trump aide Stephen Miller pushed for 3,000 arrests per day—triple the early administration pace. Only recently have we seen dramatic workplace disruptions that at one point caused Trump to pull back on raids of farmers, hotels, and other key industries that rely on immigrants for labor. However, that pause proved to only be a brief reprieve, guaranteeing that the inflationary pressures from this aggressive immigration policy will continue to build.
What truly delayed the impact of Trump's most inflationary policy was an unprecedented wave of corporate front-loading in late 2024 and early 2025. Companies rushed to import goods before tariffs took effect, creating exactly the buffer that's now insulating consumers from immediate price shocks. These panic purchases were so intense it caused the U.S. economy to contract 0.3 percent in Q1 despite robust domestic demand.
By May, container imports fell 9.7 percent as the stockpiling surge ended and higher tariff rates took hold. By stocking up as they did, companies bought themselves time to ride through a few months of high tariffs without it affecting their bottom line.
As Trump's trade war drags on, those Q1 stockpiles dwindle as companies forestall replenishing their inventories in the hope that tariff rates will suddenly come down. Freight bookings for April dropped 41 percent month-over-month as businesses adopted this "wait and see" approach. The gap between inventory levels and inventory costs has expanded to the third highest in the index's history. In essence, it is becoming increasingly expensive to store inventory while simultaneously becoming more expensive to replace it.
The Federal Reserve's stance reveals perhaps the clearest evidence that policymakers anticipate the inflationary surge ahead. Despite months of consistently lower inflation readings and unprecedented presidential pressure to cut rates, Fed officials have held interest rates steady—a decision that only makes sense if they're bracing for future price pressures.
By keeping rates elevated despite political pressure and recent good inflation data, the Fed is acknowledging their belief that current price stability is temporary. They're positioning for the inflationary impact they know is coming rather than reacting to the deceptively calm present.
The ingredients for an inflationary surge are now in place: depleted inventory buffers, supply chain disruptions in essential industries, elevated tariffs on a vast array of goods, and increasingly fragile inflation expectations. When companies exhaust their stockpiles and face the choice between absorbing higher costs or passing them to consumers, the answer isn't just predictable, it is a necessary function of the corporate mandate to maximize shareholder value.
Food prices are particularly vulnerable. With agricultural raids creating labor shortages during peak growing season and tariffs raising input costs, the sector faces a perfect storm.
The lag between policy implementation and consumer impact is ending. Trump's own acknowledgment of economic "harm" from his policies—and his scramble to dial them back—suggests the administration has already seen internal projections of what's coming. The question isn't whether Trump's policies will drive inflation, but when Americans will feel it at the grocery store.
The time bomb is real, and the fuse is shortening.
Nicholas Creel is an associate professor of business law at Georgia College & State University.
The views expressed in this article are the writer's own.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
25 minutes ago
- The Hill
Trump's choice: Bomb over blather
Winston Churchill could muse about the virtues of diplomacy, reportedly saying 'Jaw, Jaw and War, War' or words to that effect. In the case of President Trump, the decision has been made: war, not jaw, and bomb, not mere blather. The stated reason for the attack on three Iranian nuclear sites was Iran's imminent ability to assemble a nuclear weapon. That danger could not be tolerated. And Israel's evisceration of much of Iran's military leadership and its air defenses created a further opportunity for the U.S. to strike. Regardless of the accuracy of the intelligence, the administration assumed that 30 Tomahawk cruise missiles and 14 'bunker busters' bombs would impose such 'shock and awe' as to force Iran to capitulate. But no matter how well this strike was planned and executed, this relatively small use of force may prove insufficient for Iran to accept the terms of what amounts to a virtual surrender. And while bomb damage assessment will take time, suppose Iran anticipated a strike and moved its fissile material to a safe location. Of course, the Trump administration could be proven correct in its assumptions. Yet, history could be relevant. Preemptive attacks and invasions too often fail. Napoleon and Hitler thought Russia could be brought to its knees and conquered by invading armies. Japan believed that the surprise attack on Pearl Harbor and sinking the battleship fleet would cause the U.S. to negotiate. The reasons for the second Iraq War, fraudulently based on weapons of mass destruction that no longer existed, cannot be ignored. Undeclared or not, the U.S. is now at war with Iran's clerical theocracy. Beyond fog and friction, war is filled with the most deadly of ironies. While, by any measure Israel has exercised an excess of violence against Palestinians in its efforts to destroy Hamas, including the destruction of several hospitals deemed as safe havens for the enemy, after Iran struck an Israeli hospital complex, strong retaliation followed. Gaza does not seem to be an issue as Israel has broadened its offensive against Iran beyond nuclear and missile facilities. A similar irony confronts Trump's decision to enter the war on Israel's side. Having promised not to engage in forever wars, Trump could be consigning America to that fate. While the Fordow complex was the prime target for America's attack, destroying those facilities, even with 30,000-pound 'bunker busters,' cannot be assumed, and without direct physical access, the extent of damage can never be proven. What Iran does next ranges from accepting American demands to launching major strikes against both U.S. forces and Arab oil-producing facilities in the Gulf. Closing the Strait of Hormuz could lead to an economic disaster and bring U.S. forces in harm's way, should opening the strait be ordered. The strait is about 35 miles wide, bringing the U.S. Navy close to Iran's large supply of short-range missiles. More likely will be measured attacks, including cyber. And do not be surprised if Iran suspends the Non-Proliferation Treaty to which it is a signatory, signaling it may build nuclear weapons after all. Despite the euphoria accompanying the attack, what could prove worrying is the advice Trump was given, assuming he listens. First, his administration has not been in office long enough for his national security team to come together. Second, while Secretary of State and National Security Advisor Marco Rubio has served in the Senate, his wartime credentials are slim. And who would trust the secretary of Defense in these circumstances, although the news initially reported he was bypassed? The new chairman of the Joint Chiefs of Staff, Air Force General Dan Caine, has no experience or background in dealing with strategic events, only those at the tactical and operational levels. Vietnam may be relevant. If in August 1964 Lyndon Johnson had not pushed for the Tonkin Gulf Resolution, which was a de facto declaration of war in Vietnam and allowed the retaliatory air strikes against North Vietnamese targets to be sufficient warning, the catastrophe that followed would have been averted. Trump could proclaim victory and leave the scene of battle to the Israelis to finish the job —whatever that means. Has anyone reminded the president of that example? What next? No one can predict. But in these circumstances, be warned. This could be the beginning and not the end of the campaign to deprive Iran of its nuclear aspirations. Harlan Ullman, Ph.D., (@harlankullman) is UPI's Arnaud deBorchgrave Distinguished Columnist, a senior advisor at Washington, D.C.'s Atlantic Council, the chairman of two private companies and the principal author of the doctrine of shock and awe. He and David Richards are authors of a forthcoming book on preventing strategic catastrophe.
San Francisco Chronicle
25 minutes ago
- San Francisco Chronicle
Americans' take on the economy sours in June and, after a brief respite, continues to slide
WASHINGTON (AP) — Americans' view of the U.S. economy worsened in June, resuming a downward slide that had dragged consumer confidence to its lowest level since the COVID-19 pandemic five years ago. The Conference Board said Tuesday that its consumer confidence index slid to 93 in June, down 5.4 points from 98.4 last month, which represented a brief uptick. The regression surprised economists, who had expected a small uptick this month. In April, American consumers' confidence in the economy sank to its lowest reading since May 2020, largely due to anxiety over the impact of President Donald Trump's tariffs. A measure of Americans' short-term expectations for their income, business conditions and the job market fell 4.6 points to 69. That's well below 80, the marker that can signal a recession ahead. Consumers' assessments of the present economic situation declined by 6.4 points to 129.1. Tariffs and the impact they could have on personal finances remained at the top of respondents' minds, the Conference Board said. Trump's aggressive and unpredictable policies — including massive import taxes — have clouded the outlook for the economy and the job market, raising fears that the American economy is headed toward a recession. Consumers' fears of a recession during the next 12 months rose slightly in June and remain elevated, according to the survey results. The Conference Board said that the three components of the expectations Index — business conditions, job prospects, and future income — all weakened. It was the sixth straight month that respondents' views of the job market deteriorated, though the reading remains in positive territory as the U.S. labor market continues to churn out jobs. The Labor Department earlier this month reported that U.S. employers slowed hiring in May, but still added a solid 139,000 jobs amid uncertainty over Trump's tariffs. Unemployment remains historically low at 4.2%. Though concerns about inflation ticked down slightly in June, it remains a major concern among respondents, who frequently mentioned higher prices in tandem with tariffs. A government report earlier this month showed that consumer prices ticked up in May to 2.4% from a 2.3% year-over-year increase in April. Core prices, which excludes the volatile food and energy categories, rose 2.8% for the third straight month. Economists pay close attention to core prices because they generally provide a better indication of where inflation is headed. The Board said respondents' references to geopolitics and social unrest increased slightly from previous months, but are still significantly lower on the list of consumers' concerns. The deadline for survey responses was June 18, before the U.S. targeted Iranian nuclear sites but after Israel's bombing of Tehran.
San Francisco Chronicle
25 minutes ago
- San Francisco Chronicle
Life on the other side: Refugees from 'old media' flock to the promise of working for themselves
NEW YORK (AP) — Six months ago, Jennifer Rubin had no idea whether she'd make it in a new media world. She just knew it was time to leave The Washington Post, where she'd been a political columnist for 15 years. The Contrarian, the democracy-focused website that Rubin founded with partner Norm Eisen in January, now has 10 employees and contributors like humorist Andy Borowitz and White House reporter April Ryan. Its 558,000 subscribers also get recipes and culture dispatches. In the blink of an eye, Rubin became a independent news entrepreneur. 'I think we hit a moment, just after inauguration, when people were looking for something different and it has captured people's imaginations,' she says. 'We've been having a ball with it.' YouTube, Substack, TikTok and others are spearheading a full-scale democratization of media and a generation of new voices and influencers. But don't forget the traditionalists. Rubin's experience shows how this world offers a lifeline to many at struggling legacy outlets who wanted — or were forced — to strike out on their own. Tough business realities, changing consumer tastes The realities of business and changing consumer tastes are both driving forces. YouTube claims more than 1 billion monthly podcast views, and a recent list of its top 100 shows featured seven refugees from legacy media and six shows made by current broadcasters. Substack, which launched in 2017 and added live video in January, has more than doubled its number of paid subscribers to participating content creators to 5 million in less than two years. Almost immediately after he was cut loose by ABC News on June 10 for an anti-Trump tweet, Terry Moran headed for Substack. Two former hosts of NBC's 'Today' show — Katie Couric and Hoda Kotb — announced new media ventures on the same day last month. 'I think you've seen, really in the last six months for some reason, this whole space explode with people who are understanding that this is a really important way to convey information,' says Couric, who's been running her own media company with newsletters, interviews and a podcast since 2017 and recently joined Substack. Among the most successful to make transitions are Bari Weiss, the former New York Times writer whose Free Press website celebrates independent thought, the anti-Trump Republicans at Bulwark and ex-MSNBC host Mehdi Hasan, who champions 'adversarial journalism' on Zeteo. Television news essentially left Megyn Kelly for dead after her switch from Fox News to NBC went bust. She launched a podcast in 2020, at first audio only, and SiriusXM picked it up as a daily radio show. She added video for YouTube in 2021, and gets more than 100 million viewers a month for commentary and newsmaker interviews. This year, Kelly launched her own company, MK Media, with shows hosted by Mark Halperin, Maureen Callahan and Link Lauren. While they thrive, the prospect of layoffs, audiences that are aging and becoming smaller and constant worry about disappearing revenue sources are a way of life for legacy media. Moving to independent media is still not an easy decision. Taking a deep breath, and making the leap 'If I'm going to jump off a cliff, is there water or not?' former 'Meet the Press' moderator Chuck Todd says. 'I didn't know until I left NBC. Everybody told me there would be water. But you don't know for sure until you jump.' It takes some adjustment — 'At first I was like, 'do you know who I used to be?'' Couric jokes — but some who have made the jump appreciate the nimbleness and flexibility of new formats and say news subjects often respond to the atmosphere with franker, more expansive interviews. Jim Acosta, who traded a CNN anchor desk for a video podcast he does from his home after deciding not to make a move he considered a demotion, says he's been surprised at the quality of guests he's been able to corral — people like Hakeem Jefferies, Pete Buttigieg and Sean Penn. Many podcasters succeed because they communicate authenticity, former Washington Post editor Marty Baron said in an interview at the George W. Bush Presidential Center. Traditional journalists trade on authority at a time people don't trust institutions anymore, he said. Couric has seen it in some of the feedback she gets from subscribers. 'There's some disenchantment with legacy media,' she says. 'There are certainly some people who are frustrated by the capitulation of some networks to the administration, and I think there's a sense that when you're involved in mainstream media that you may be holding back or there may be executives who are putting pressure on you.' Is there an audience — and money — on the other side? Substack says that more than 50 people are earning more than $1 million annually on its platform. More than 50,000 of its publishers make money, but since the company won't give a total of how many people produce content for the platform, it's impossible to get a sense of the odds of success. Alisyn Camerota isn't making money yet. The former CNN anchor left the broadcaster after she sensed her time there was running out. Blessed with a financial cushion, she's relishing the chance to create something new. She records a video podcast, 'Sanity,' from her basement in Connecticut. A former Fox colleague who lives nearby, Dave Briggs, joins to talk about the news. 'It's harder than you think in terms of having to DIY a lot of this,' Camerota says, 'but it's very freeing.' Different people on the platform have different price points; some publishers put everything they do behind a pay wall, others only some. Acosta offers content for free, but people need to pay to comment or discuss. Zeteo charges $12 a month or $72 a year, with a $500 'founding member' yearly fee that offers access to Mehdi. The danger for independent journalists is a market reaching a saturation point. People already stress over how many streaming services they can afford for entertainment. There's surely a limit to how many journalists they will pay for, too. 'I hope to make a living at this,' Acosta says. 'We'll see how it goes. This is a bit of an experiment. I think it's a valuable one because the stakes are so high right now.' A strong point of view is one route to success To succeed in independent media, people need a strong work work ethic, self-motivation and an ability to pivot quickly to deal with changing markets, says Chris Balfe, founder of Red Seat Ventures. He has created a thriving business ushering conservative media figures into the new world, including Kelly, Bill O'Reilly, Tucker Carlson and Piers Morgan. Balfe's clients all have strong opinions. That's a plus for consumers who want to hear their viewpoints reflected back at them. 'I think you need a point of view and a purpose," Rubin says. "Once you have that, it helps you to organize your thinking and your selections. You're not going to be all things to all people.' That's one of the things that concerns Acosta and Todd. They're looser, and they certainly say what they think more than they felt free to do on television; a remark Acosta made on June 17, while appearing on Rubin's podcast, about Trump marrying immigrants was criticized as 'distasteful' by the White House. But at heart, they consider themselves reporters and not commentators. Is there enough room for people like them? Todd has a podcast, a weekly interview show on the new platform Noosphere and is looking to build on an interest in improving the fortunes of local news. He believes that opinion can help someone build an audience quickly but may ultimately limit growth. As Rubin did, they will find out soon enough. 'As it turned out," she says, 'what was on the other side was much more exciting and successful and absorbing than I could ever have imagined.' ___
