According to new data from the Bureau of Labor Statistics, consumer prices in June increased by 2.7% compared to one year prior. The June figure is a modest increase from the 2.4% rise recorded in May, suggesting that inflation isn’t going away anytime soon.
Although economists expected the slight elevation in consumer prices, investors and families were hoping to be surprised. Until inflation slows dramatically, the Federal Reserve is unlikely to reduce interest rates, which remain higher than the 10-year average. Increased interest rates mean consumers and businesses must pay more to finance debt, driving up costs for important, high-priced purchases, like office buildings, homes, vehicles, and industrial equipment.
Critics of President Trump across the ideological spectrum have taken the June inflation figure as an opportunity to blame the White House for its controversial trade policies.
For much of his first term in office, Trump has threatened and imposed a variety of tariffs on countries around the world, including a 10% baseline tariff for most countries and a 30% tariff levied on imports from China.
According to Trump, tariffs are a useful tool for negotiating better trade agreements, ensuring U.S. manufacturers can better compete with foreign competitors, and keeping industries, products, and services important to national security from moving overseas.
Regardless of where you stand on tariffs, the most recently available government data make one thing abundantly clear: contrary to what you have heard from the president’s critics, it is highly unlikely that tariffs have caused inflation to increase in recent months.
You don’t need to take my word for it. The proof is in the data.
Inflation is calculated using the Consumer Price Index (CPI). Although CPI increased in June (2.7%) compared to May (2.4%), both June and May were lower than the CPI recorded in December 2024 (2.9%) January 2025 (3%)—well before any of Trump’s tariffs went into effect. That means inflation is lower today than when Trump entered the White House.
Categorial price data also suggest inflation is not being caused by Trump’s tariffs. For example, CPI prices for clothing and other apparel declined in June compared to one year earlier, even though 97% of apparel sold in the United States comes from overseas and is thus more likely than other kinds of products to be impacted by tariffs.
Similarly, new vehicle prices declined slightly in June compared to May, despite Trump’s 25% tariffs on imported cars and auto parts.
Government data also reveal that overall import prices for consumer goods—which are calculated before tariffs are applied—have been decreasing in recent months compared to one year ago. This suggests that overseas manufacturers are willing to drop their prices and reduce their profits to stay competitive with American customers.
The inflation increase experienced in June was driven primarily by CPI housing data, not consumer products. The CPI shelter index rose by 3.8%.
Housing is highly unlikely to have increased in recent months due to tariffs. This is especially probable because the Bureau of Labor Statistics relies on rent data to calculate the shelter index, not building costs.
Additionally, the rapid increase in the cost of housing started during the Biden administration, not under Trump, and it hasn’t stopped ever since.
Of course, none of this means that the Trump administration’s tariffs will continue to defy expectations in the months and years to come. It’s entirely possible that we will soon see inflation skyrocket. But as it stands today, government data clearly suggest that President Trump’s tariffs are not having a negative impact on consumer prices.
Why, then, are so many of the president’s critics claiming otherwise?
Although motivations vary from person to person, it seems that some anti-tariff libertarians and conservatives desperately want to see Trump’s tariffs increase prices because it would prove their long-standing economic theory about globalization is true. Their view, not the pro-tariff economic policies of the Trump administration, has dominated the Republican Party for decades.
Democrats, on the other hand, appear motivated to shift the blame away from the Biden administration, which helped create America’s recent inflation crisis by recklessly increasing spending and imposing policies that drove up the cost of energy, housing, and numerous other parts of the economy.
By tying every increase to the CPI, however slight, to Trump, many on the left think voters will forget about the inflation crisis created when Democrats were in charge of Congress and the White House.
Rather than focus on their feelings, policymakers and pundits should commit themselves to the pursuit of the truth instead, regardless of what that means for their political aspirations or ideology.
And at present, the truth is that there is very little evidence that the president’s tariffs are wreaking havoc on the economy or causing widespread inflation for consumers.
Editor’s Note: Thanks to President Trump’s leadership and bold policies, America’s economy is back on track.
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