Trump finds tamping down costs to be tricky
Axios · LC · trust 50/100
President Trump is reaching deeper into individual markets to try to ease consumer price strains . Why it matters: The administration is under mounting pressure to deliver relief as affordability becomes a bigger political liability ahead of the midterms. The push is cutting against — and sometimes rolling back — pillars of Trump's economic agenda, including tariffs and favoring domestic producers. And the moves may offer limited relief, reflecting how difficult it is for presidents to broadly bring down prices. Driving the news: Trump said yesterday that he will temporarily waive tariffs on up to 300,000 metric tons of additional beef imports for 90 days, a period that would last through the midterms. A White House official said exporters agreed to a 25% discount, though it's unclear how much will reach consumers. U.S. cattle producers blasted the move, warning that cheaper imports could hurt ranchers and efforts to rebuild their depleted herds. By the numbers: Ground beef averaged $6.89 a pound in July, about $3 more than before the pandemic. Prices were up about 10% from a year earlier. The big picture: Beef shows how difficult it can be to quickly bring down prices when multiple forces are pushing them higher. Drought and high costs have shrunk the U.S. cattle herd, while imports have been constrained by limits on Mexican cattle and tariffs on Brazil, a major beef exporter. Beef is the latest target in interventions aimed at bringing down costs: Borrowing costs. The administration has tried to push down longer-term rates through Treasury debt purchases and moves to lower mortgage rates. This week's initial relief was short lived. Gas. Trump has pushed energy companies to cut pump prices as the Iran war sent oil prices soaring. Retail. The White House has pressed major retailers to cut prices, touting recent reductions at Walmart and others as evidence its pressure is working. The other side: Prescription drugs are a bright spot, with prices dropping at the quickest rate in six decades due to a mix of Trump- and Biden-era policies, as well as market forces. What to watch: Americans still feel squeezed. Paychecks have failed to outpace inflation for three straight months. Consumer sentiment fell about 8% in early August as the Iran war fueled inflation worries, with Republicans posting the biggest drop, according to the University of Michigan. More than 9 in 10 consumers expect their incomes to fall behind inflation or merely keep pace over the next year.
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