MS NOW
MS NOWJan 1
Economics

Does Trump know what he's doing? New tariffs likely to keep up costs for Americans

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TL;DR

Trump's new tariffs will cost American households $1,100 to $1,200 annually while he claims affordability is a hoax — even as his own base sours on his economic management.

Key Insights

1

Tariffs cost $1,100 per household — Trump's new tariffs will cost the average American household roughly $1,100 to $1,200 annually — on top of existing price pressures from gas, fertilizer, and geopolitical factors that are already adding hundreds more.

2

Section 301 gives firmer legal ground — The Supreme Court ruled Trump's original tariffs unlawful in February, so the administration is now using Section 301 of the Trade Act as a workaround — a legally shakier but more defensible avenue than before.

3

76% disapprove on inflation — 76% of Fox News poll respondents disapprove of Trump on inflation; 58% say deepening economic pain is their concern, up from 50% in February — a dramatic shift in his economic credibility.

4

Economy is now a liability — Unlike Trump's first term when voters gave him credit for pre-COVID economic performance, he's now unpopular on both his overall job and specifically on the economy — his traditional strength is now a liability.

5

Affordability is a hoax — Trump dismisses affordability concerns as a 'made-up hoax' invented by Democrats while simultaneously overseeing tariff-driven price increases and gilding the Oval Office with gold — a messaging disconnect that undercuts any economic messaging.

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Deep Dive

The Legal Workaround Trump Is Using

Natasha Seren, a Hofstra Law professor, explains that Trump's new tariffs are essentially a patch job following the Supreme Court's February ruling that declared the earlier tariffs unlawful. The old tariffs operated under the IEEPA statute, which didn't mention tariffs at all — leaving Trump vulnerable to judicial challenge. Now the administration has pivoted to Section 301 of the Trade Act, which gives Congress a statutory hook for trade retaliation. James Sample, a Yale constitutional law expert, notes this puts Trump on firmer legal ground than before, though the new challenges will be more fact-intensive and nuanced. The effective tariff rate now sits between 10% and 12.5% across most of the economy. The strategy is essentially to bet the courts will take time to catch up and declare these actions invalid, buying Trump runway before legal defeat.

The Real Cost: $1,100+ Per Household

When asked about the practical impact, Seren delivers the headline number: tariffs are adding roughly $1,100 to $1,200 in annual costs for the average American household. This isn't on top of nothing — it's stacked on existing pain. Gas prices are elevated from Trump's Iran war posture. Fertilizer costs are up. The Iran conflict alone is adding $550 per household. Meanwhile, the tax cut passed last year provides only a $350 increase to the average refund. That means a median household is facing roughly $2,000 in total price increases this year, with the tax break covering less than 20% of the damage. Seren's math is stark: the tariff impact alone dwarfs any economic relief voters are receiving, and it's happening on everything Americans buy — both imports and domestic products competing with imports.

Trump's Unshakeable Faith in Tariffs Despite Polling Collapse

David Drucker frames Trump's tariff commitment as an article of faith rooted in his pre-political and political career, noting that Trump believes tariffs improve the economy and no data will change his mind. Drucker compares this to Trump's COVID strategy: after a few weeks of mitigation, he got tired and declared things normal. Now he's doing the same with the economy — declaring tariffs will fix everything and expecting Americans to just get back to normal. The problem is the polling reality is brutal. A Fox News poll shows 76% disapprove of Trump on inflation; 58% cite deepening economic pain as their top concern, up from 50% in February. But the real political danger, Susan Glasser emphasizes, is that Trump's economic credibility — his main lifeline in his first term — has completely collapsed. In 2020, swing-state voters said they didn't like him personally but believed he was good for the economy. Now even that excuse is gone. Glasser notes even Republicans and independents are softening on him over economics.

The Optics Problem: Gold Medallions While Voters Struggle

The panel pivots to what Glasser calls the optical disaster of Trump's choices. While Americans are being asked to pay $1,100+ more annually in tariff-driven costs, Trump has transformed the Oval Office into what Glasser describes as excessive gold plating — reminiscent of the wealth display at Trump Tower and Mar-a-Lago. Simultaneously, Trump is dismissing affordability as a hoax that Democrats invented, undercutting any attempt to show empathy with struggling voters. Drucker explains Trump's logic: politicians resist admitting they're responsible for things outside their control, and Trump especially doesn't want to accept blame. So he deflects and dismisses, then aggrandizes himself through opulent redesigns. Drucker notes Trump is a personalist who needs to be feted, and if voters won't do it, he will do it himself. The contradiction is stark — voters say their top concern is affordability, they're being asked to pay more, and the president responds by telling them affordability is fake while surrounding himself with gold. It's a messaging failure that compounds the economic damage.

Takeaways

  • ✓Monitor your household spending across groceries, goods, and services — tariff-driven inflation will compound with existing cost pressures (gas, fertilizer, Iran war impacts).
  • ✓Track approval polling on Trump's economic stewardship separately from general job approval — the divergence shows his only political cushion is eroding.
  • ✓Watch for court challenges to Section 301 tariffs using different legal theories than February's IEEPA ruling — the administration is betting litigation takes years.
  • ✓Understand Trump's tariff belief is ideological, not data-driven — no economic evidence will shift his course, making policy predictability impossible.

Key moments

3:04The $1,100 price tag per household

“That translates to about $1,100 of increased prices essentially across the board on everything that they buy. Not just imports, domestic products too that are competing with those imports.”

4:18Trump's tariff theology

“He doesn't believe in much besides his own infallibility and his ability to make the world as he wishes it to be. But he does believe in tariffs, and he believes in their ability to improve the economy. And no amount of data is going to sway him.”

5:49Fox News: 58% see deepening economic pain

“Deepening economic pain is the headline. That's up from 50% in February. 51% say their finances are worse than two years ago. And 76 percent disapprove of Donald Trump on the subject of inflation.”

7:45Affordability is a hoax claim backfires

“He has taken to saying affordability is a made-up hoax. He says the Democrats invented this word and it's not even true. It doesn't mean anything. And it's not a very good way to get the voters' empathy if you're saying basically, stop whining.”

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