President Donald Trump’s sweeping tariffs earlier this year set off alarm among economists about a risk that just about every U.S. shopper fears: major price hikes.
Instead, inflation has cooled, defying doomsday predictions and helping to propel sturdy economic performance.
The decline of inflation owes in part to a flood of imports ahead of the levies, which allowed companies to stockpile non-tariffed goods and sell them with little change in price, analysts told ABC News. A drop in oil prices, they added, helped put downward pressure on a range of costs.
Still, some accelerated price increases will likely take hold as companies sell through warehoused products and additional tariff proposals emerge, analysts said, but the outcome remains uncertain amid Trump’s fluctuating policy.
“There was a lot of expectation that the tariffs would result in a very rapid increase in consumer prices and that has not materialized – yet,” Jason Miller, a professor of supply chain management at Michigan State University, told ABC News.
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Trump has touted the absence of price hikes over recent months, often repeating a two-word assessment: “No inflation”
“Under President Trump, America is defeating inflation,” the White House said last month, promising a “Golden Age with lower costs, higher pay, and economic opportunity for all.”
During the campaign, inflation consistently ranked as a top issue of concern to voters – and a majority of them favored Trump to best handle the problem, surveys showed.
Trump vowed to address the issue, saying he would lower prices on “day one.”
Inflation has eased since Trump took office, meaning prices have risen at a slower pace than they had been at the end of the Biden administration. Consumer prices increased 2.4% in May compared to a year earlier, hovering near the lowest inflation since 2021.
Even a blistering surge in egg prices has slowed. The price of eggs climbed 41% over the year ending in May, which marks a reduction from 53% inflation recorded in January.
Overall prices have not fallen, however.
“It’s not surprising to me that Trump wouldn’t be able to force prices down. They’re set by the market,” Kara Reynolds, an economist at American University, told ABC News. “There aren’t that many levers a president can pull.”
To be sure, oil prices have dropped nearly 15% since Trump took office. Analysts attributed the trend to an anticipated drop in demand as investors worry about a global economic slowdown, instead of the spike in U.S. output promised by Trump. The decline in energy prices has helped cool inflation, they said, since oil makes up a key input cost for the transport of many products.
“One of the reasons we’ve seen inflation come down is because energy prices have come down,” David Ortega, a food economist at Michigan State University, told ABC News.
The recent reduction of inflation may prove a temporary reprieve, however, some analysts said.
As tariffs continue to take hold, they said, importers will likely show strain under the tax burden and pass along a share of the cost to consumers.
Importers paid roughly $24 billion in tariffs in May, more than tripling the $7 billion paid in January, U.S. Census Bureau data showed.
“There’s a rock solid body of evidence that shows this will eventually show up in higher consumer prices,” Neale Mahoney, a professor of economics at Stanford University and a former special adviser for economic policy to the White House National Economic Council under President Joe Biden, told ABC News. “We’re not out of the woods.”
Some prices have shown signs of possible tariff impact, analysts said. Major appliances, which the U.S. imports primarily from China, saw prices jump more than 4% from April to May. Bananas, a perishable item for which the U.S. relies almost entirely on imports, jumped 3% over that same period.
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The Federal Reserve issued a forecast last month indicating some concern about a rekindling of inflation. The personal consumption expenditures index, a measure of inflation preferred by the Fed, will rise from 2.1% to 3% over the remainder of 2025, the central bank predicted. That forecast marked higher inflation expectations than the central bank had issued in March.
Analysts cautioned, however, about the high degree of certainty surrounding that path forward for inflation, noting the frequent modifications of Trump’s tariff policy. Trump on Monday extended the delay of so-called reciprocal tariffs until Aug. 1, pushing back the arrival of some of the steepest levies.
A potential resurgence of inflation may come about within the coming months but could surface as late as next year, Miller said.
But, Miller added, “We will see how things play out.”
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