Trump’s approaches to trade and immigration extend inflation and worsen the affordability crisis

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Trump’s approaches to trade and immigration extend inflation and worsen the affordability crisis

Bitget-RWA2025/11/23 22:54

By:Bitget-RWA

- Moody's Zandi warns Trump's tariffs and immigration restrictions worsen inflation and affordability crises by disrupting supply chains and labor markets. - CBO revised tariff revenue estimates downward to $3 trillion by 2035, citing legal challenges, while Treasury's Bessent claims inflation is "under control" despite tariff adjustments. - Tariff renegotiations with Brazil and India highlight global adaptation to Trump's trade policies, yet Zandi predicts elevated prices will persist beyond 2026. - Immig

America’s affordability crisis is worsening, with Moody’s Analytics chief economist Mark Zandi warning that President Donald Trump’s trade and immigration strategies are fueling higher inflation. Zandi points out that consumer price inflation is hovering around 3%, and argues this situation could have been avoided if Trump had not enacted broad tariffs and stricter immigration rules, which have disrupted both global supply chains and the labor force

the analysis indicates

New figures from the Congressional Budget Office (CBO) highlight this pattern, as the agency has reduced its projected deficit savings from Trump’s tariffs to $3 trillion by 2035, down from $4 trillion last August. The CBO

explained the adjustment

by citing updated data and recent court decisions that have questioned the administration’s legal authority to levy tariffs. Meanwhile, Scott Bessent from the Treasury Department

downplayed inflation worries

, insisting that price levels are “well managed” and attributing inflation primarily to service sectors rather than tariffs.

Yet, recent tariff changes tell a different story. Trump has

lifted tariffs on Brazilian farm products

, such as beef and coffee, in an effort to lower food prices amid growing public discontent. In a similar move, India

committed to sourcing 10% of its liquefied petroleum gas

from the U.S., sidestepping the threat of 500% tariffs on Indian exports and illustrating how nations are adjusting to Trump’s trade policies.

Trump’s approaches to trade and immigration extend inflation and worsen the affordability crisis image 0

Despite these policy shifts, Zandi’s research finds that inflation remains persistently high, with tariffs and immigration limits likely to keep prices elevated past 2026

the report states

Stricter immigration enforcement has further strained the economy. Federal actions in cities like Charlotte, North Carolina, along with ongoing legal disputes over deportation rules, have increased instability in the labor market

the report notes

. Representative Buddy Carter (R-Ga.) has

advocated for a larger federal role

in Atlanta, citing the presence of “over half a million undocumented immigrants” in Georgia, while immigrant rights groups warn these actions are destabilizing communities. Zandi

connected tough immigration policies

to a shrinking labor pool, which could hinder wage growth and prolong affordability issues for working- and middle-class families.

The Federal Reserve is facing a challenging situation. Although September’s jobs and manufacturing reports point to economic resilience, inflation still exceeds the Fed’s 2% goal

economic indicators show

. Fed Chair Jerome Powell has

urged caution regarding interest rate cuts

, expressing concern that Trump’s policies may complicate efforts to control inflation.

Public opinion reflects these difficulties. A University of Michigan poll revealed that consumer confidence dropped to 51 in November, nearing historic lows, as families struggle with rising expenses for food, housing, and medical care

the survey found

. Political opposition is growing, with Democrats leveraging affordability concerns in recent campaigns. However, Treasury Secretary Bessent remains hopeful, pointing to tax reductions and cheaper energy as drivers of economic growth by 2026

the analysis suggests

As the administration contends with these economic headwinds, the outlook for stability is still unclear. Zandi’s caution—that inflation and affordability challenges are likely to persist—echoes the skepticism many Americans now feel toward official statements

the report concludes

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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