Trump Tariffs Not Fueling Inflation Attributable to ‘Patriotism’ Shopping for, Says White Home Advisor Hassett
Washington, D.C. – On July 14, 2025, White Home Nationwide Financial Council Director Kevin Hassett attributed the dearth of widespread inflation from President Donald Trump’s current tariff insurance policies to elevated demand for American-made merchandise, pushed by what he referred to as “patriotism within the information.” Talking on CNBC’s Squawk Field, Hassett argued that Trump’s management has inspired customers to “purchase American,” lowering reliance on imports and mitigating worth will increase sometimes related to tariffs.
Tariff Insurance policies and Financial Impression
President Trump’s newest tariff wave, together with a 30% tariff on items from the European Union and Mexico set to start August 1, 2025, and extra duties on dozens of nations, has sparked considerations about inflation and international commerce disruptions. Nevertheless, Hassett cited a White Home report claiming that imported items costs fell between December 2024 and Could 2025, suggesting that tariffs haven’t but pushed up prices for American customers. He argued that overseas international locations with commerce deficits are absorbing tariff prices somewhat than passing them on, and that lowered demand for imports—fueled by patriotic shopper habits—has stored costs secure.
Hassett’s claims align with posts on X, the place some customers famous that import costs dropped 1.2% final quarter whereas tariff income reached $89 billion, suggesting Trump’s technique has pressured international locations like China to decrease their levies from 125% to 10%. Nevertheless, these figures are inconclusive and require additional scrutiny, as they distinction with warnings from economists like former Treasury Secretary Larry Summers, who referred to as tariffs “the most important self-inflicted wound” on the U.S. financial system, predicting larger inflation and lowered development.
Criticism and Counterarguments
Critics, together with Ernest Tedeschi, director of economics at Yale’s Price range Lab and former Biden administration economist, have challenged the White Home report’s methodology, arguing it understates tariff results. Tedeschi pointed to Harvard College’s Pricing Lab information exhibiting rising import costs since March 2025, when tariffs on Canada, Mexico, and China took impact. JPMorgan Chase has additionally raised considerations, estimating a 60% international recession danger on account of tariff-induced uncertainty, up from 40%.
Moreover, some analysts word that importers stockpiled items in anticipation of tariffs, briefly muting worth will increase. This might delay inflationary results, with many nonetheless anticipating larger costs later in 2025. Federal Reserve Chair Jerome Powell has warned that the commerce warfare might result in “larger inflation and slower development,” contradicting Hassett’s optimism.
Broader Context and Market Response
Hassett’s remarks come amid unstable market reactions to Trump’s tariff insurance policies. The Dow Jones Industrial Common fell 2,231 factors (5.5%) on a single day following the tariff rollout, with the S&P 500 and Nasdaq additionally experiencing important declines. A short market rally occurred on April 7, 2025, after a misinterpreted remark by Hassett on Fox Information recommended a attainable 90-day tariff pause, however the White Home rapidly debunked this as “pretend information,” inflicting shares to drop once more.
Regardless of these fluctuations, Hassett stays assured, citing “anecdotal” proof of U.S. auto vegetation including shifts on account of elevated home demand. He additionally famous that over 50 international locations have reached out to barter commerce offers for the reason that tariffs have been introduced, suggesting Trump’s technique is bringing buying and selling companions to the desk.
Skepticism and Future Outlook
Whereas Hassett’s “patriotism” narrative has resonated with some supporters, as seen in X posts praising tariff income funding priorities with out tax hikes, it faces skepticism. Critics argue that the long-term affect of tariffs, together with potential retaliation from international locations like China and Canada, might nonetheless drive inflation and disrupt provide chains. The EU’s scramble to barter earlier than the August 1 deadline underscores international considerations about escalating commerce tensions.
As Trump’s tariffs proceed to dominate financial discussions, the talk over their inflationary affect stays unresolved. Whereas Hassett’s claims of patriotic shopping for provide a hopeful narrative for the administration, impartial information and skilled analyses recommend that inflationary pressures could emerge as stockpiles dwindle and international commerce dynamics shift.