Trump finds tamping down costs to be tricky
· Axios
President Trump is reaching deeper into individual markets to try to ease consumer price strains.
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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 lambasted 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.