US President Donald Trump’s trade war is taking a toll on consumers and businesses, with rising costs for grocery staples and critical materials. The effects are becoming harder to ignore, especially across key inflation indicators that may intensify in the months ahead.
Global tariffs are putting pressure on costs, with US businesses bearing the brunt despite White House hopes that foreign suppliers would absorb some of the burden. However, instead of discounts, import prices have risen at their fastest pace this year, casting doubt on the administration’s claims.
The latest data shows a 40% spike in fresh and dry vegetable prices, the largest increase since inflation began in 2022. Mexico, a leading supplier of American vegetables, is subject to 25% tariff rates until the end of October. The Consumer Price Index also revealed evidence of tariff-related price hikes, but at a lower rate than expected.
Chicago Fed President Austan Goolsbee warned that new tariff announcements could keep inflationary pressure on, making it more likely that interest rate cuts later this year will be delayed or even reversed. A persistent inflation would derail the anticipated series of interest rate cuts and may put additional pressure on the Federal Reserve to maintain its hawkish stance.
President Trump celebrated his sweeping new tariffs taking effect on dozens of trading partners, claiming “BILLIONS OF DOLLARS” are now flowing into the US. However, businesses warn that they will have to pass costs onto consumers, highlighting the human impact of the trade war.
Source: https://www.axios.com/2025/08/17/trump-trade-war-inflation