From Yahoo Finance: 2025-05-13 14:09:00

President Trump’s promise to lower prices seems to be coming true as inflation fell to 2.3% in April. However, experts warn that his tariffs on imports could lead to another bout of inflation in the near future. Markets surged after Trump and China agreed to deescalate their trade war, but tariffs remain high. The average import tax has risen to about 18%, impacting prices for consumers.

Economists expected tariff price hikes to show up in April’s inflation data, but importers managed to keep retail prices under control. However, forecasts suggest inflation could jump to 3.8% by June, posing challenges for consumers. Higher prices are expected on products from China due to the highest tariffs, affecting lower-income individuals more.

Consumer sentiment has plunged since Trump took office, with expectations of 6.5% inflation within a year. While Trump may see imposing tariffs now as better than later, consumers are bracing for price hikes. The University of Michigan’s consumer sentiment index has dropped significantly, reflecting concerns about rising inflation.

Read more: Inflation would be licked, if not for the Trump tariffs