NOT QUITE LIBERATION DAY

Inflation Spikes as Trump Tariffs Start to Bite

The figures are a blow to the president, who came to office promising to reduce cost of living pressures.

Inflation has surged to its highest level since February in an early sign that President Donald Trump’s tariffs are starting to hit Americans.

Three months since he promised to “Make America Wealthy Again” with sweeping new tariffs, Trump faces the harsh reality that his controversial trade wars are starting to push up the price of certain goods, such as furniture, clothing, and large appliances.

According to the Labor Department’s latest figures, consumer prices rose 2.7 percent in June from a year earlier—the swiftest pace since February and up from an annual pace of 2.4 per cent in May.

Core inflation—which takes out volatile food and energy prices and is seen as a reliable benchmark for underlying cost pressures—was also up 2.9 percent from the same time last year.

The figures are a blow to the president, who came to office promising to tackle inflation and reduce cost of living pressures for Americans.

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But Trump was noticeably silent about the latest numbers when they came out on Tuesday morning, using his first social media post of the day to suggest, without evidence, that Democrat Senator Adam Schiff, his longtime political foe, engaged in “mortgage fraud” and ought to be prosecuted.

“Donald Trump calls for Adam Schiff’s prosecution minutes after inflation numbers come out showing inflation increased in June. Coincidence? I think not,” said Jessica Tarlov, the resident Democrat on Fox News’ The Five.

Worsening inflation will not only be a political challenge for Republicans ahead of next year’s midterm elections, it will also likely heighten the reluctance by the Federal Reserve to cut its short term interest rates.

Trump has been demanding Fed Chair Jerome Powell cut interest rates for months, threatening at times to sack him and calling him everything from Jerome “Too Late” Powell to a “knucklehead” and “a stupid guy.”

“We have a bad Fed chairman, really bad,” Trump said at the White House on Monday, saying he wanted rates lowered to less than one per cent. “I tried being nice to the guy. It doesn’t help. He’s like a knucklehead. Oh, he’s a knucklehead, a stupid guy. He really is.”

The June data still reflects only the early impact of Trump’s global trade war, which began in April when Trump imposed a 10 percent baseline tariff on imports from nearly all countries, with higher rates applied to countries that carried the largest trade deficits with the U.S.

Since then he has flip-flopped on policies to such an extent Wall Street nicknamed him TACO Trump—Which stands for “Trump Always Chickens Out.”

After promising to secure “90 deals in 90 days” with countries on trade, the administration has now written to nations around the globe dictating what they should pay.

But experts warn this “take it or leave it” approach is likely to push up costs even higher.

The White House, however, says otherwise, pointing to its own figures suggesting the cost of items such as gas, smart phones and energy is falling.

“Ignore the doomsayers—Trump’s economy is STRONG with inflation remaining low,” policy communications director Jacki Kotkiewicz said in a statement.

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Farrah TomazinPolitical Correspondent

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