Economy

Trump’s Inflation Claims Challenged: How Rising Costs Reflect His Policies

Trump claimed to solve inflation, but CPI data showed a 2.9% rise, highest this year; tariffs, immigration cited.

byAndres Castro

September 12, 2025, 10:34 AM

Two young women in a supermarket aisle look at a product on a shelf

Two women read a product label in the dairy or refrigerated section of a supermarket. By MDL.

Executive Summary

President Donald Trump’s claim of having “already solved inflation” is contradicted by August CPI data showing a 0.4% rise and an annual inflation rate of 2.9%, the highest since January.

Economists attribute the accelerating consumer price increases primarily to Trump’s administration’s tariff policies on imports and stepped-up immigration enforcement.

Key drivers of inflation include significant increases in food prices, coffee (up 3.6% due to Brazil tariffs), and tomatoes (up 4.5% due to Mexico tariffs), alongside higher labor costs from reduced immigrant workers.

The Story So Far

The current acceleration in consumer prices, which contradicts President Trump’s claims, is largely attributed by economists to the administration’s policies, specifically increased tariffs on imported goods that are driving up costs for items like coffee and tomatoes, and stepped-up immigration enforcement, which has reduced the workforce in sectors like agriculture and food services, leading to higher labor and food prices.

Why This Matters

The latest Consumer Price Index data, showing an accelerating annual inflation rate of 2.9%, contradicts President Trump’s claim that inflation is solved, indicating rising costs for consumers. This increase is largely linked by economists to the administration’s tariff policies, which have driven up prices for imported goods such as coffee and tomatoes, and to immigration enforcement, which has increased labor costs in agriculture and food services. Economists anticipate further firming of consumer inflation readings in the coming months as businesses pass on these increased costs.

Who Thinks What?

President Donald Trump asserts that he has “already solved inflation” and that “costs are down,” claiming there is “almost no inflation anymore.”

Economists contend that new Consumer Price Index (CPI) data shows an accelerating annual inflation rate, attributing these rising prices to the administration’s tariff policies and increased immigration enforcement.

White House press secretary Karoline Leavitt highlights that the annual inflation rate during Donald Trump’s term is slightly lower than the headline figure and predicts the “Trump economic agenda” will fuel an economic boom.

President Donald Trump declared on Friday that he has “already solved inflation” and that “costs are down,” a statement that contrasts with new Consumer Price Index (CPI) data released Thursday. The Bureau of Labor Statistics reported that consumer prices rose 0.4% in August, pushing the annual inflation rate to 2.9%, the highest level since January. Economists suggest that some of these increases are linked to the administration’s tariff policies and stepped-up immigration enforcement.

Inflation Data Contradicts Presidential Claim

Donald Trump asserted during a Fox News interview that there is “almost no inflation anymore.” However, the latest CPI data indicates an accelerating pace of consumer price increases, marking the highest annual rate recorded this year.

Many economists argue that the administration’s policies, including higher tariffs on imports and increased enforcement against undocumented immigrants, are contributing to these rising prices. Brian Coulton, chief economist at Fitch Ratings, noted that there is “slowly — quite slowly in fact — but surely, we are seeing evidence of more tariff pass through” to consumers.

Conversely, White House press secretary Karoline Leavitt highlighted that the nation’s annual inflation rate during Trump’s term this year is slightly lower than the 2.9% headline figure. Leavitt stated that the “Trump economic agenda” is expected to “fuel an economic boom” through investments, tax cuts, deregulation, and energy dominance.

Key Contributors to Price Increases

Food prices were among the most significant drivers of inflation in August, with grocery prices seeing a 0.6% increase, the largest monthly jump in nearly three years. Prices for food consumed at restaurants and other eateries also rose by 0.3% last month, matching the previous month’s rate.

Impact of Tariffs on Food and Goods

Heavily imported goods subject to higher tariffs experienced some of the steepest price increases. Coffee prices, for instance, surged by 3.6% in August, marking the largest one-month increase since 2011, and are up 20.9% compared to a year ago. Brazil, a primary source of U.S. coffee imports, began facing 50% tariffs last month.

Tomato prices also rose by 4.5% last month. The United States relies heavily on Mexico for fresh tomatoes, which began facing 17% tariffs in July following the expiration of a long-standing trade agreement.

Beyond food, other tariff-exposed goods saw notable price hikes in August. These included sewing machines, fabric, and supplies, which rose 9.1%; jewelry, up 6.8%; women’s outerwear, increasing 4.4%; and men’s pants and shorts, up 4.2%. The one-month jump in jewelry prices was reportedly the largest since the Bureau of Labor Statistics began tracking CPI in the late 1910s.

Influence of Immigration Policies

Professor Sung Won Sohn of Loyola Marymount University told CNN that President Trump’s immigration policies, including mass arrests and deportations, are also contributing to higher food prices. According to Pew Research Center estimates, over 750,000 immigrants have left the U.S. workforce since January.

Sohn, who is also chief economist at SS Economics, explained that the agriculture and food services sectors are particularly dependent on foreign-born workers. Fewer immigrant workers have led to increased labor costs, subsequently fueling higher food prices.

Future Outlook on Inflation

While the overall impact of tariffs on the August inflation report was relatively modest, economists suggest this could change. Prices have been partially contained because businesses stockpiled inventory before tariffs took effect, and many have absorbed the majority of tariff costs rather than passing them on to consumers.

JPMorgan economist Michael Hanson noted that businesses might be avoiding price hikes in hopes that many of President Trump’s tariffs could be invalidated by an ongoing Supreme Court case. Regardless of the outcome, Hanson anticipates the administration will maintain an elevated effective tariff rate, leading to expectations of “additional firming of consumer inflation readings in coming months.”