Trump is right: He lowered some of your costs. But he also made many prices higher

By David Goldman, CNN

(CNN) — President Donald Trump keeps downplaying America’s affordability crisis, and he continues to falsely claim that inflation and overall prices have fallen during his second term.

“Our prices are coming down very substantially on groceries and things,” Trump told reporters in Florida Sunday evening. “They’re already at a much lower level than they were with the last administration.”

The truth is annual inflation stood at 3% in September. Grocery prices have gained 1.4% between January and September, and US consumer prices have risen 1.7% on average during Trump’s second term, according to the Bureau of Labor Statistics.

But that’s just an average. Look a little more closely, and Trump really can claim credit for some falling prices. But he is also to blame for some rising prices.

A complex mix of factors determines the price of any particular item. As anyone who took Econ 101 remembers, supply and demand remain the primary influences over consumer prices. But commodity costs, wholesale prices, transportation and fuel concerns, regulations, labor and a whole host of other considerations can weigh on what people ultimately pay at the store.

But Trump’s policies, perhaps more than any president’s in recent memory, have directly influenced the prices on thousands of consumer goods – both lower and higher.

What Trump has done to lower prices

Drugs: Pharmaceuticals remain the the most prominent example of Trump directly influencing prices lower. Trump has put significant pressure on drugmakers to lower prices, and many have followed suit.

Most recently, Trump and his administration announced that certain blockbuster obesity drugs will be available for as little as $149 per month, significantly lower than the list prices, which can top $1,000. Trump has also announced deals with Pfizer, AstraZeneca and others to set prices of new medications at “Most Favored Nation” levels, the lowest price made available in peer countries.

Eggs: When Trump took office, egg prices had been surging because a deadly avian flu epidemic devastated the egg-laying hen population. Egg prices peaked above $8 a dozen in late February after rising steadily over the previous year.

A couple weeks into Trump’s term, his USDA announced an initiative to lower prices by increasing biosecurity on egg-laying farms, providing aid to farmers who lost flocks and temporarily lifting restrictions on egg imports. The plan worked: Egg prices have since fallen to just over $2 a dozen.

Oil: Trump dismantled many oil drilling regulations that he claimed would expand US oil production – but, so far at least, that hasn’t made any meaningful difference. Trump, however, publicly pressured OPEC+ on prices, and though the group of oil-producing nations denied Trump had anything to do with its decision, OPEC+ boosted production several times this year, and US oil fell below $60 a barrel – down from $75 when Trump took office.

Industry experts have partially attributed OPEC’s decision to Trump’s influence, although they also say OPEC’s hand may have been forced by nations that acted independently of the group. And oil prices have ebbed and flowed with sinking demand and on-and-off Middle East conflicts throughout the year, as well.

Trump has also announced some policies that could have long-term benefits for consumers but whose effects remain to be seen.

Beef and fruit: Last week, Trump signed executive orders that lowered tariffs on imported beef and other produce that mostly grows overseas. That could lower some of those prices, but the tariff cuts largely just restore import prices to where they were before Trump launched his sweeping trade war.

Cars: Trump’s domestic policy and tax bill did away with a number of financial penalties on automakers that fail to meet fuel efficiency rules. That is saving some US automakers billions of dollars a year and could cut the cost of building a vehicle by 3% to 5%, according to Dan Ives, analyst at Wedbush Securities. But that may not translate to lower consumer prices because Trump also raised tariff costs on automakers.

What Trump has done to raise prices

Tariffs: By far the largest price increase on consumers that Trump has imposed came in the form of his sweeping tariffs on virtually every foreign country’s goods. That has raised the effective US tariff rate to 13.6%, up from 1.2% in 2024 – a gigantic tax increase that has raised the average American household’s costs this year by $1,200, according to the conservative-leaning Tax Foundation.

The calculation is tricky, because tariffs are paid by US importers who typically pass those costs onto wholesalers, retailers and eventually consumers. JPMorgan this month estimated that consumers are currently paying about 20% of tariffs’ costs, but many businesses have announced they can no longer afford to eat those expenses and will soon be forced to raise consumer prices. That’s why the Tax Foundation estimates the average household’s annual costs will rise by $1,600 because of Trump’s tariffs next year.

Benefits cuts: Historic cuts to America’s safety net programs, including Medicaid and food stamps, will raise out-of-pocket expenses for the country’s neediest: Those earning less than $18,000 a year will have to spend more than 1% more going forward because of Trump’s tax and spending policy bill, according to Penn Wharton

The bill also cut some popular tax credits, including the $7,500 that the government chipped in when customers bought electric vehicles.

America’s debt: Trump’s massive tax cut and spending bill will add nearly $4 trillion to America’s $36 trillion in debt, according to a Congressional Budget Office report. That briefly sent the bond market into a tizzy in May, leading US Treasury yields, which trade in opposite direction to prices, significantly higher. Investors had effectively sent a warning that they may be unwilling to keep funding the government’s coffers unless they get paid more for it.

Yields have since come down – but not by a ton. The benchmark 10-year Treasury yield, which influences mortgage, credit card and auto loan rates, remains above 4.1%.

Trump’s spending and economic policies have also hurt the dollar, which has fallen more than 8% this year. That can boost the appeal of US-made goods abroad, but it also makes foreign goods more expensive for Americans.

Meanwhile, Trump has effectively tried to will lower prices into existence, recently calling America’s affordability crisis a “lie” and a “complete con job.” The White House, while casting blame elsewhere, acknowledged it has some work to do.

“The Trump Administration will not rest until the high prices that resulted from Democrat policies are fully reined in,” the White House said in a statement Friday. “We’re making progress — and the best is yet to come.”

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