Former president Trump likes to attack President Biden’s record on inflation. For example, last month in New Hampshire, Trump said: “Biden’s inflation catastrophe is demolishing your savings and ravaging your dreams.”
It is ironic, then, that two of Trump’s signature 2024 campaign promises — a massive increase in tariffs and a massive reduction in immigration — would also cause prices to spike.
Trump has floated creating “a ring around the U.S. economy” by imposing a blanket 10 percent tariff on all imports to the U.S. This would directly raise the prices of trillions of dollars of imports, eroding the purchasing power of consumers’ wages and incomes. It would raise the prices of intermediate goods for U.S.-based firms, which would lead to further price increases for American consumers. And it would lead to retaliatory tariffs from other nations, causing further price hikes.
Trump has also pledged to begin the largest deportation operation in U.S. history if elected in November. An abrupt, intrusive, hurried, and massive effort to deport millions would have a significant impact on businesses, leaving many with jobs unfilled and unable to find workers. These labor shortages would surely put upward pressure on wages, leading consumers to face price spikes. For example, the price of groceries would suddenly spike.
From an economic perspective, the trade and immigration policies suggested by Trump would surely impose meaningful price increases on consumers. That could spark an inflationary cycle — exactly what Trump is criticizing Biden for having created. They would be a very big deal with very noticeable economic effects.
Beyond inflation, they would also be economic malpractice. For a variety of reasons, the U.S. needs more immigrants, not fewer. And demonizing immigrants would lead to terrible long-term consequences for the United States. Trade policy conducted with a bazooka instead of a scalpel will hurt, not help, the working class. Grievance-onomics doesn’t work.
President Biden should do better on both these fronts. I argued in June 2022 that the president’s refusal to eliminate Trump’s China tariffs left hollow his inflation-fighting rhetoric. Biden’s record on immigration has been disappointing. And Biden’s fiscal policy has certainly contributed to U.S. inflation.
But voters, remember: Trump’s signature policies would lead to price spikes. They would lead to substantial economic disruption. They would hurt workers and households.