The Trump administration was voted in to turn price hikes around and make things more affordable. It’s time to try harder.
The last six weeks of the year are critical for the U.S. economy — retailers traditionally reap their highest sales figures, create seasonal employment and see a boost in profits.
It’s also, of course, a crucial time for Americans hoping to buy holiday gifts (and maybe snag a little something for themselves). But retailers aren’t offering as many seasonal jobs this year, the forecast for holiday spending is mixed, and prices remain stubbornly high.
Ornaments that previously would have been stocking-stuffers were over my threshold. It’s the same sticker shock I’ve come to expect at the grocery store, especially when stocking up to feed extended family. (Friend to friend: “If you were going to save yourself some work and buy store-bought Christmas cookies this year, the cost of premade baked goods is up too, so pull down the flour.”)
Free-marketeers aren’t usually the life of the party (I say this with love) but their absence will be felt this December. It seems we are stuck between a protectionist regime on the political right and resurgent socialist energy on the political left. Not good news for consumers.
Members of the Trump administration have pointed to data to refute the bad economic vibes. To some extent, they are right. There’s been “savings” from a reduction in inflation relative to the runaway Biden era. Real incomes are up by nearly 1% year-over-year, according to the Bureau of Labor Statistics. Certain things like gasoline and interest rates (and thus mortgage rates) are down. And we mustn’t forget the tax relief passed as part of the reconciliation package.
On the other hand, that tax relief won’t be felt until April 2026, way after holiday presents are bought and paid for. Although price increases are indeed lower than during the Biden era, prices themselves remain elevated and some are rising. Interest rates still feel high to an electorate accustomed to the historically low levels of the 2010s.
Affordability is a bipartisan concern. Trump is 39 points underwater on the cost of living, according to a recent Reuters/Ipsos poll. Anxiety about inflation is top of mind for voters all across America — in college towns and Evangelical communities, in rural areas and big cities, and among white, Hispanic and Black counties.
Some in the White House say prices are only elevated because we’re coming off the Biden-era bender. By this logic, they just need more time to see things right. But just as during the Biden administration, the rise in prices under the Trump administration is an unforced economic error. Don’t take my word for it: They are admitting it themselves, albeit quietly.
What we are seeing is two sides of the same coin (recall, inflation is too much money chasing too few goods). Although many countries experienced unavoidable pandemic-era inflation from supply chain backups, the Biden administration added to the problem in the U.S. by passing massive stimulus packages after the economy had largely stabilized. A demand-side error. The Trump administration’s rise in certain prices is also an unforced error, simply in reverse, by introducing massive tariffs and workplace raids and limiting the flow of labor and goods. A supply-side error.
Realizing their political liability, the Trump administration has lowered tariffs on household items such as coffee, bananas, beef and tomatoes. This is a good start. If prices fall it will be because of rollbacks like these — and more of them. All it takes is a slice of humble pie (surely there are Thanksgiving leftovers) and the swipe of a pen!
But we’re not there yet. This holiday season, many American small businesses and consumers remain hard-hit. For them, tariffs feel personal. My siblings run an online store selling rugs part-time while raising lots of kids. Turns out, Turkish rugs aren’t made in the U.S. They are taking home less profit, just in time for Christmas.
I have a friend who runs a successful clothing business that heavily relies on foreign imports. During the 2024 presidential campaign, this friend was a big Trump booster, mostly excited about the Make America Healthy Again movement. She even had a keychain on her purse that was what can best be described as a Trump troll, a plastic body with fuzzy long hair. I was with her recently and her business has taken a hit; they are letting someone go and cancelling year-end bonuses. So much for the funny keychain.
I recently ordered something from Etsy. I was surprised to find that the item wouldn’t be delivered until I wrote an additional $32 check to the U.S. Postal Service for the tariff amount, which will go straight from my pockets into Uncle Sam’s coffers. At first, I thought it was a scam, until I paid and my item was promptly delivered. Try to tell me that a tariff is not a tax.
Here’s the problem with “affordability.” The Trump administration says, we’re better for prices than the Democrats. The Democrats say, we’re better for prices than the GOP. Each side has some good ideas and some bad ones. And around and around we go.
We have to stop and get the fundamentals right, stop being our own worst enemies. This includes but is not limited to: tax and regulatory restraint, reducing the deficit, free and fair trade, an independent Federal Reserve, predictable policy.
If Santa is listening, can you drop economics textbooks down a few chimneys in Washington, DC?
Abby McCloskey is a columnist, podcast host, and consultant. She directed domestic policy on two presidential campaigns and was director of economic policy at the American Enterprise Institute.
