Businesses certainly think so, which is why they’re calling out the Trump tariffs, even at the risk of provoking a combative president.
Trump’s new taxes on imported goods haven’t reignited inflation yet, but many economists think they’re about to. Overall, Trump has raised the average tariff on some $3 trillion of imported goods from 2.5% to about 18%. Most goods on shelves now come from pre-tariff inventories. But those supplies will soon start to run out, and many goods — including clothing, medicine, appliances, toys, cars, and car parts — will bear the higher cost of tariffs that in most cases add 10% to 30% to the cost of imported goods.
The battle is fully underway over who should get the blame when higher prices hit consumers. Companies such as Walmart (WMT), Mattel (MAT), Microsoft (MSFT), and Ford (F) have said openly that tariffs will lead to higher costs for consumers. Trump has fired back, saying American businesses should “eat” the tariffs by fully absorbing the higher costs without charging consumers more.
Trump’s bully megaphone works, to some extent. Amazon (AMZN) considered, then abandoned, a plan to highlight the added cost of tariffs in a line item on its website, then backed down when Trump complained to executive chair Jeff Bezos. Some companies hope to avoid Trump’s ire by using elliptical language to explain price hikes. Subaru (7270.T), for instance, recently said it’s raising the price of several models because of “current market conditions,” with no mention of tariffs.
But there's thorough evidence that consumers will end up bearing the cost of Trump's tariffs, and the blame game will intensify as consumers start to notice higher prices and get angry at… somebody. Businesses see it coming, and they have good reasons for trying to head off another hit to their reputation.
Many consumers already blame corporate America for the elevated inflation that began in 2021 and peaked at a punishing 9% in 2022. President Joe Biden and Vice President Kamala Harris, the Democratic presidential nominee in 2024, both hammered corporations for “price gouging,” even though research has shown they were mostly passing along their own higher costs.
Consumers are already blaming big companies for Trumpflation, even if it's premature. New polling by Morning Consult finds that 57% of Americans blame US companies for tariff-related inflation, up from 34% when the research firm asked a similar question in January about tariffs that were then hypothetical.
In the same poll, 80% of respondents said they blame Trump. But that may not cheer many companies raising prices, since consumers can perceive more than one villain and still punish companies, even if they’re playing a supporting role.
Big companies such as Walmart may seem like monolithic profit machines that don’t care if their customers hate them, no matter how much lip service they pay to branding and their so-called “stakeholders.” But they do care, because brand strength can provide an edge against competitors, especially in cyclical, lower-margin businesses such as retail.
Consumer-facing businesses spend bajillions to establish brand loyalty and keep customers for as long as possible, a task that rising prices makes a lot harder. A 2024 study by the Boston Consulting Group found that with inflation top of mind, 30% of shoppers would buy from a different source if they could save money. Price, not quality, was the top factor driving consumers to switch purveyors.
A 2024 Gartner study found a strong correlation between price stability and brand loyalty, with 80% of survey respondents saying brands that offer consistent pricing are more trustworthy. Those findings suggest that what really irks shoppers is unexpected or abrupt price changes rather than any given price level.
The Trump tariffs are unexpected and abrupt by nature, since businesses can’t anticipate them and there’s no public playbook. Trump may even relish the shock his tariff threats cause, since it keeps attention on him and his power to move markets.
That leaves businesses with the awkward choice of either blaming price hikes on Trump and risking his wrath or leaving their customers guessing about why they’re raising prices. Publicly owned companies have some cover because they’re obligated to be transparent with shareholders about factors affecting costs, pricing, revenue, and profitability. Trump would have to change corporate disclosure laws to relieve CEOs of that burden, and that’s not in the cards.
Smaller companies, wholesalers, and generic suppliers can be frank with their customers about Trumpflation because Trump isn’t likely to see them on the evening news bashing his import taxes. In fact, the more that companies connect the Trump tariffs with price hikes throughout the supply chain, the more this will become a mainstream narrative that Trump can’t refute.
It's already happening. Though tariff price hikes aren’t here yet, the University of Michigan’s monthly surveys show that consumers are broadly bracing for another spurt of inflation during the next 12 months, caused specifically by Trump’s tariffs. The message businesses are trying to send is already getting through.
It will be clearer yet when shoppers begin to see the tariff-related price hikes with their own eyes, especially if the sellers are telling them why.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman.
