In a reaction to the steep tariffs in President Donald Trump’s ongoing trade war, rumors emerged in April that online retail giant Amazon was planning to display tariff-based price increases on product pages, so consumers would see just how much more money they are paying for items.
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Trump was reportedly very displeased, and Amazon later denied it was actually going to list tariff information on its website.
This didn’t stop White House Press Secretary Karoline Leavitt from asking, “Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?”
In this politically-charged environment, perhaps it’s a fair question worth asking.
It’s a question Yahoo Finance addressed as early as September 2024, two months before Trump’s reelection. Trump had already made clear his plans to levy tariffs upon many of America’s trade partners, and Yahoo Finance, projected what, exactly, that would look like — and how it would cost more than Biden-era inflation.
These are the key reasons why Trump’s tariffs are more costly.
Trump’s Tariffs Actually Worsened Biden’s Inflation
Per Yahoo Finance’s senior columnist Rick Newman, the Congressional Budget Office (CBO) estimated in 2020 that the tariffs Trump instituted in his first administration would likely reduce the gross domestic product (GDP) by 0.5%, raise prices across the board by 0.5% and, in the end, cost most households an average of $1,277 annually because of those high prices and slowed growth.
While the disruption caused by the COVID-19 pandemic made it difficult to confirm those estimates, it is likely that Trump’s tariffs contributed to the staggering inflation rate that peaked at 9% in 2022.
The Math Just Doesn’t Add Up
Even further, Newman charted how overall price levels raised 19.7% during the Biden administration. Using that percentage against the overall average cost of living, Newman found that Biden-era inflation forced Americans on average to pay $468 more per year.
Conversely, Newman compared that number to a study performed by the Peterson Institute for Internal Economics, which projected that Trump’s second administration tariffs will cost the average American household an extra $2,600 per year.
No additional cost is convenient, but an extra $468 per year simply isn’t the same as $2,600.