Washington, D.C. — Over the past two weeks, the Trump administration’s economic agenda has come into sharp focus with two key policy initiatives: universal tariffs on all U.S. trading partners plus large tariffs on China and Republicans in Congress advancing a budget resolution to double down on President Donald Trump’s supply-side tax agenda. A new Center for American Progress article explains how, taken together, debt-financed supply-side tax cuts on top of the widespread tariffs threaten to increase inflation and interest rates higher than they are otherwise projected to be while lowering wages.
This article examines previous trends in year-over-year price increases and how Trump’s tariffs will reverse all of this progress by disrupting supply chains and making almost all imports more costly for both companies and families—which will leave families having to pay more for everything from strawberries to cars. In addition, this article reviews how the proposal to extend the Tax Cuts and Jobs Act (TCJA) that disproportionately favors high-income earners will only push interest rates and inflation higher due to the Federal Reserve’s previous “play-it-safe” policy and the tax cuts extension skyrocketing the federal deficit by 5 trillion dollars or more.
“The Trump administration is showing its cards on their economic agenda and two things are clear—it will unnecessarily raise both interest rates and inflation,” said Christian E. Weller, senior fellow and author of the article. “At the end of the day, families will be the ones facing higher costs, greater risk of debt delinquency, and more hurdles for buying a homes because of Trump’s chaotic approach to tariffs and congressional Republicans push to extend the TCJA to give tax breaks to the wealthy.”
Read the article: “Congressional Republicans Tax Proposals Would Push Inflation and Interest Rates Unnecessarily High” By Christian E. Weller
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