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As inflation rises, reality is setting in for the Trump administration: The executive branch has few tools that can unilaterally tame it — let alone lower prices as promised.
Two of President Donald Trump’s top priorities — sweeping tariffs and the Iran war — have fueled an ongoing spike in grocery, gas, and other prices. As the midterms near, polls show Americans are at a breaking point: Consumer sentiment has plummeted to record lows, while survey after survey reveals growing disapproval of Trump’s handling of the economy.
But unless he reverses course on tariffs and Iran, Trump’s options to fix that are extraordinarily limited. Some, like suspending the gas tax, would require a skeptical and mostly gridlocked Congress to act. Others, like rolling back tariffs on beef, face enough resistance from key Republican allies that the White House has decided they’re untenable.
And the few levers Trump can pull without congressional approval or political blowback are probably too small-scale to catch voters’ attention. Trump isn’t giving up; an order he signed Thursday loosens restrictions on refrigerants, a long-shot bid to lower grocery prices.
But the Federal Reserve, not the White House, controls monetary policy — and Congress, not the White House, holds the power to subsidize goods. That leaves Trump in the same bind several predecessors have faced, Joe Biden most famously.
“I can tell you with some authority that there’s very little you can do to lower prices,” said Jared Bernstein, who chaired the former president’s Council of Economic Advisers. “Trust me, if presidents had that dial on the Resolute Desk, they’d be turning it all the time.”
Beyond definitively ending the war and forsaking his core trade agenda, he can lower existing tariffs “that aren’t what we would call Trump tariffs,” said Scott Lincicome, vice president of economics at the libertarian Cato Institute. That includes slashing the fees the Commerce Department charges to discourage demand for imported goods — known as anti-dumping and countervailing duties — and rejecting the International Trade Commission’s recommendations.
The president could also issue more visas to foreign workers and waive the Jones Act, which restricts travel between US ports, for all products (he’s already issued a waiver for fuel and its inputs). Other options include rolling back regulations on imported goods, like baby formula, and energy projects, like transmission lines.
But each of these moves would face blowback, and none would have more than a marginal effect on prices, according to economists across the ideological spectrum. Scrapping the Jones Act, for instance, would spark outrage over national security while saving Americans just cents at the pump.
“There’s death by 1,000 cuts; this is the opposite, it’s life by 1,000 Band-Aids,” Lincicome said. There are “all of these types of barriers” built into economic policy, he added, “and every time you eliminate one, somebody screams bloody murder.”
A White House spokesperson, Kush Desai, told Semafor in a statement that “inflation was cool” and “wages were growing” before the Iran war began because of Trump’s “supply-side policy agenda.” The president, Desai added, “remains laser-focused on cutting costs and accelerating growth on the home front.”
“As these policies continue taking effect, and as President Trump forces this conflict to a successful end, both energy prices and inflation will drop again,” Desai said.
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Consumer prices rose 3.8% in April from a year prior, 0.1% faster than economists had expected and the fastest pace since March 2023 (though last year’s government shutdown is still affecting the data). The root causes may be different, but it’s still a struggle former Biden officials know well.
“This is kind of the same playbook,” said the progressive Groundwork Collaborative’s Alex Jacquez, who served on Biden’s National Economic Council. “You stare at a long list of things that either will make a marginal amount of difference or will at least kind of look like you are taking this seriously and taking action — but the reality is that there’s only so much that you can do from the executive branch.”
One key difference between the two men: Biden “bent over backwards to argue that the Fed should raise rates if they thought that was best,” said Michael Strain, director of economic policy studies at the conservative American Enterprise Institute.
“The most important thing the president can do [for inflation] is appoint high-quality Fed officials and then leave them alone,” Strain added. “President Biden was exemplary on that front … and President Trump has been terrible on that front.”
Trump has shown little interest in either of his most effective solutions to rising inflation. He hasn’t walked away from Iran and is redoubling on his trade agenda, even as Americans faced the highest Memorial Day weekend gas prices in four years.
“The majority of the problem right now, obviously, is the price of gasoline,” said Rep. David Joyce, R-Ohio.
Volatility in the bond market might make Trump more interested in a resolution in the Middle East. The 30-year yield recently rose to an almost two-decade high as the conflict fueled investors’ inflation fears.
The president “does seem capable of being spooked by the bond market,” Bernstein said.
But the conflict is already running the risk of a long-tail effect on gas prices that could take a while to return to prewar levels. Scrapping Trump’s tariffs would be a different story.
“Reevaluate tariffs,” recommended retiring Rep. Don Bacon, R-Neb. “That’s the easiest way to lower inflation.”
It’s unlikely Trump turns his back on his trade agenda altogether. But Lincicome predicted that “you will see some quiet moves to liberalize certain trade barriers,” especially after the president last year showed a willingness to roll back tariffs on goods like coffee.
The same goes for foreign workers, he forecasted, given Trump also paused immigration raids targeting farm and hospitality employees.
Room for Disagreement
Asked by Semafor recently how he might try to bring down costs, Trump seemed to indicate he didn’t need to. The war would end soon, he said, and prices would sink immediately.
“This is peanuts, and I appreciate everybody putting up with it for a little while,” Trump said. “It won’t be much longer.”
On Monday, the US launched “self-defense” strikes on Iran, throwing tentative ceasefire negotiations into further doubt.
Eleanor’s view
When you’ve got a bad hand, your best bet is to bluff. The administration is doing just that by contending that things like the refrigerant order will make a difference, even though they probably won’t.
It’s the same way that Biden’s team tried to cope. Another parallel: Trump, too, is leaning heavily into the promise that any pain Americans are feeling is short-term.
But neither worked for Biden — and the short-term argument is an even tougher sell now.
Trump meanwhile continues trying to compel the Fed to lower borrowing costs by cutting interest rates, which is not only out of his control but would feed inflation.
Amid it all, Republicans are facing down Democrats with plenty of ways to remind voters of what Trump’s second term has done to the cost of living. Trump’s recent White House event on prescription drug prices belies the spiking insurance costs that resulted from the GOP’s decision to let enhanced Affordable Care Act subsidies lapse last year.
Notable
- Walmart shoppers filled their tanks with less than 10 gallons of gas in the most recent quarter for the first time since 2022, the Wall Street Journal reports.
- The price of gas is the most important number in US politics, Bloomberg reports.
Nicholas Wu and Shelby Talcott contributed to this report.