Six months into President Donald Trump’s tariff policy, the impacts are being felt unevenly across the US economy. What began as an international negotiation over trade deficits has now started to affect the daily needs of many middle and working-class American families. While shoppers are already paying more at the checkout line, the Yale Budget Lab estimated that Trump’s tariffs might result in more poverty, increasing the number of impoverished Americans by 875,000 come 2026. However, the future of these tariffs remains uncertain as the Supreme Court is set to rule on their legality.
In a weakening economy, the inflation rate typically decreases due to lower interest in purchases and lower demand for goods and services. However, Phillip Swagel, the Congressional Budget Office director, stated that Trump’s tariffs have increased inflation more than initially expected. This suggests that they were more than enough to counteract that effect, pushing costs higher than they originally were. T
The Consumer Price Index (CPI), which measures the average change in prices of a fixed product for consumers, showed a 2.9 percent increase this August compared to the previous year, a development which many economists attribute to the tariffs among other comparatively insignificant reasons such as labour market conditions and federal reserve policies. Many US businesses stocked up on goods and products to postpone price raises, but others redirected additional costs to customers when the tariffs started affecting their profit margins. Economists have predicted this moment. Tariffs, they warned, work like hidden taxes: importers pay them at the border, then pass the costs to stores, and eventually, to consumers.
To examine the real-life manifestations of the tariffs, a few CA students of various backgrounds were interviewed about the effect of Trump’s tariffs on their daily lives. A local day student cited increasing prices at the Concord Cheese Shop as an example, referring back to Trump’s first presidency when similar price hikes occurred. “It’s going to have broader implications to the greater American economy”, they added, citing stock market crashes in March and April when the tariffs were first introduced.
An international student from China, one of the major targets of the current tariffs, stated that he faced increased international tension when travelling between China and the US over the summer, recalling concerned relatives warning him about international travel. They also raised concerns about a decrease in the number of international students applying for schools like CA due to international tension, rising tuition, and living expenses, along with rising prices of heavily imported everyday products.
These concerns around rising prices of household products are also echoed by the general public. Fears of rising prices are warranted; CBS reports a major price hike in both household and luxury items—namely a 50 percent increase in price for South American coffee beans, a roughly 6 percent increase in price for watches and women’s dresses, and even a 6.6 percent increase in price for bananas.
In a recent study, the Yale Budget Lab estimated that households are paying 2300 dollars more each year from tariffs. The lab also stated that the tariffs would pose a large threat to middle and low-income families who spend a larger proportion of their income on daily necessities. The lowest-earning 10 percent of US families would experience an average hit of 1350 dollars to their income due to the current tariffs, alongside a 1200 dollar decrease in income due to the Big Beautiful Bill.
The Trump administration suggests otherwise, stating that new tax benefits are abundant in offsetting the additional costs of tariffs, and that Trump’s policies are actually “boosting the economy.” On the contrary, the Yale Budget Lab found that this was only the case for the top 10 percent of the American population, earning an average of 518,000 dollars per year. They found that the tax cuts largely benefit high earners, providing them with savings substantial enough to overcome new tariff costs; this is not the case for middle and low-income families.
The tax bills also cut into the American social safety net, defunding Medicaid and food assistance. Combined, these factors set the stage for a perfect storm that will test the resilience of American households and the economy at large.