WASHINGTON (AP) — With characteristic bravado, Donald Trump has vowed that if voters return him to the White House, “inflation will vanish completely."
It’s a message tailored for Americans who are still exasperated by the jump in consumer prices that began 3 1/2 years ago.
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Yet most mainstream economists say Trump’s policy proposals wouldn't vanquish inflation. They’d make it worse. They warn that his plans to impose huge tariffs on imported goods, deport millions of migrant workers and demand a voice in the Federal Reserve's interest rate policies would likely send prices surging.
Sixteen Nobel Prize-winning economists signed a letter in June expressing fear that Trump's proposals would “reignite’’ inflation, which has plummeted since peaking at 9.1% in 2022 and is nearly back to the Fed’s 2% target.
The Nobel economists noted that they aren't alone in sounding the alarm.
“Nonpartisan researchers,” they said, “predict that if Donald Trump successfully enacts his agenda, it will increase inflation.”
Last month, the Peterson Institute for International Economics predicted that Trump’s policies — the deportations, import taxes and efforts to erode the Fed's independence — would drive consumer prices sharply higher two years into his second term. Peterson's analysis concluded that inflation, which would otherwise register 1.9% in 2026, would instead jump to between 6% and 9.3% if Trump's economic proposals were adopted.
Many economists aren’t thrilled with Vice President Kamala Harris’ economic agenda, either. They dismiss, for example, her proposal to combat price gouging as an ineffective tool against high grocery prices. But they don’t regard her policies as particularly inflationary.
Mark Zandi, chief economist at Moody’s Analytics, and two colleagues have estimated that Harris' policies would leave the inflation outlook virtually unchanged, even if she enjoyed a Democratic majority in both chambers of Congress. An unfettered Trump, by contrast, would leave prices higher by 1.1 percentage points in 2025 and 0.8 percentage points in 2026, they concluded.
Taxes on imports — tariffs — are Trump’s go-to economic policy. He argues that tariffs protect American factory jobs from foreign competition and deliver a host of other benefits.
While in office, Trump started a trade war with China, imposing high tariffs on most Chinese goods. He also raised import taxes on foreign steel and aluminum, washing machines and solar panels. He has still grander plans for a second term: Trump wants to impose a 60% tariff on all Chinese goods and a “universal’’ tariff of 10% or 20% on everything else that enters the United States.
Trump insists that the cost of taxing imported goods is absorbed by the foreign countries that produce those goods. The truth, though, is that U.S. importers pay the tariff — and then typically pass along that cost to consumers in the form of higher prices, which is how Americans themselves end up bearing the cost of tariffs.
What’s more, as tariffs raise the cost of imports, the weakened competition from foreign products makes it easier for U.S. producers to raise their own prices.
“There’s no question that tariffs are inflationary,’’ said Kent Smetters of the University of Pennsylvania’s Penn Wharton Budget Model, which studies the costs of government policies. “Exactly how much – that’s where economists can debate it."
The inflationary impact of tariffs can depend on how consumers react to higher import prices: Do they keep buying the costlier foreign stuff — whether a coffeemaker from China, a box of Swiss chocolates or car made in Mexico? Or do they shift to an American-made alternative product? Or stop buying such goods altogether?
Kimberly Clausing and Mary Lovely of the Peterson Institute have calculated that Trump’s proposed 60% tax on Chinese imports and his high-end 20% tariff on everything else would, in combination, impose an after-tax loss on a typical American household of $2,600 a year.
Trump has made some implausible claims for protectionist policies. Asked how he would lower grocery prices — a particular irritant to many Americans — Trump has said the nation should limit the importation of food because America's farmers are “being decimated’’ by foreign competition.
“It’s sort of nonsensical to say that I am worried about high food prices, so I want to put a tax on food imports,” said Clausing, who is also a UCLA economist specializing in tax policy. “As you tax them, the food in the grocery store absolutely gets more expensive.”
A huge proportion of food consumed in the United States — about 60% of fresh fruit and 38% of vegetables — are imported, according to Department of Agriculture data. Less than 1% of the bananas Americans eat are grown domestically. The vast majority are imported. The United States grows less than 1% of the coffee it consumes. It imports more than 70% of its seafood.
“Trump is using tariffs as a political device to signal his strong skepticism around globalization broadly — ‘America First,’ ” said Zandi of Moody’s Analytics. “That this policy stance is inflationary is very difficult for most voters to grasp, especially when they are being told the opposite.’’
The Trump campaign points out that U.S. inflation remained low even as Trump aggressively imposed tariffs as president. Consumer prices rose just 1.9% in 2018, 2.3% in 2019 and 1.4% in 2020. And they note that, once in office, the Biden-Harris administration retained most of Trump’s tariffs, though Harris has criticized his plans to vastly expand their use.
“In his first term, President Trump instituted tariffs against China that created jobs, spurred investment and resulted in no inflation,’’ Anna Kelly, a spokeswoman for the Republican National Committee, has said.
But Zandi of Moody’s Analytics noted that the sheer magnitude of Trump’s new tariff proposals has vastly changed the calculations.
“The Trump tariffs in 2018-19 didn’t have as large an impact as the tariffs were only just over $300 billion in mostly Chinese imports,’’ he said. “The former president is now talking about tariffs on over $3 trillion in imported goods across all countries.’’
And the inflationary backdrop was radically different during Trump’s first term. Back then, the Fed worried mainly about raising inflation up, not down, to its 2% target. The economy’s unexpectedly high-octane rebound from the COVID-19 recession of 2020 caused severe shortages of parts and labor and unleashed inflationary pressures that had lain dormant for decades.
Trump, who has invoked incendiary rhetoric and spread falsehoods demonizing immigrants, has promised the “largest deportation operation in the history of our country." He says it would target the millions of foreigners living in the United States illegally.
A surge in immigrants, like the one the United States has experienced the past few years, tends to make it easier for businesses to hire workers. The result is that can help cool inflation by easing the pressure on employers to sharply raise pay and to pass on their higher labor costs to their customers by increasing prices.
New immigrants also spend money, notably on housing, and so, at least in theory, can fuel upward pressure on prices and rents. But many economists say they doubt that that's happening now. Paul Ashworth of Capital Economics notes that today's immigrants are highly likely to work and less likely to spend than native-born Americans, in part because they typically send money back to relatives in their home countries. Many economists, in fact, say the overall effect of increased immigration has been to help tame inflation while avoiding a painful recession — in other words, to achieve an economic “soft landing."
The Congressional Budget Office reported in January that net immigration — arrivals minus departures — reached 3.3 million in 2023, more than triple what it had expected. Employers needed the new arrivals. With the economy having roared out of the pandemic recession, companies were struggling to hire enough workers to keep up with customer orders, especially because so many native-born baby boomers were entering or nearing retirement.
Immigrants filled the gap. Over the past four years, the number of people in the United States who either have a job or are looking for one rose by nearly 8.5 million. Roughly 72% of them were foreign born.
Economists Wendy Edelberg and Tara Watson of the Brookings Institution’s Hamilton Project found that by raising the supply of workers. the influx of immigrants allowed the United States to generate jobs without overheating and accelerating inflation.
In the past, economists generally estimated that America’s employers could add no more than 100,000 jobs a month without overheating the economy and igniting inflation. But when Edelberg and Watson included the immigration surge in their calculations, they found that monthly job growth could reach 160,000 to 200,000 without exerting upward pressure on inflation.
Trump's mass deportations, if carried out, would change everything. The Peterson Institute calculates that the U.S. inflation rate would be 3.5 percentage points higher in 2026 if a second Trump administration managed to deport all 8.3 million undocumented immigrant workers who are thought to be working in the United States.
Trump alarmed many economists in August by saying he would seek to have “a say” in the Fed’s interest rate decisions.
The Fed is the government’s chief inflation-fighter. It attacks high inflation by raising interest rates to try to restrain borrowing and spending, slow the economy and cool the rate of price increases. In March 2022, the Fed initiated an aggressive series of rate hikes to combat the worst bout of inflation in four decades. From a peak of 9.1%, inflation has dropped back close to the Fed’s 2% target.
Economic research has found that the Fed and other central banks can effectively manage inflation only if they're kept independent of political pressure. That’s because raising rates to fight inflation typically slows the economy and sometimes causes a recession. Politicians generally prefer that the Fed not raise rates, the result of which could imperil their re-elections.
As president, Trump frequently hounded Jerome Powell, the Fed chair he had chosen, to lower rates to try to juice the economy. For many economists, Trump's public pressure on Powell exceeded even the attempts that Presidents Lyndon Johnson and Richard Nixon made to push previous Fed chairs to keep rates low — moves that were widely blamed for helping spur the chronic inflation of the late 1960s and ’70s.
“The perception that the central bank was dancing to a president’s preferred tune ... would compromise its ability to raise interest rates when it believed that to be necessary in order to combat inflation,” said Samuel Gregg, a political economist at the free-market think tank American Institute for Economic Research.
The Peterson Institute report found that upending the Fed's independence would persistently increase inflation by 2 percentage points a year.
“While Trump promises to ‘make the foreigners pay,’ ‘’ the researchers concluded in their Peterson report, ”our analysis shows his policies will end up making Americans pay the most."
FILE - Cranes and transporters work at an automated container port in Qingdao in eastern China's Shandong province on July 7, 2024. (Chinatopix Via AP, File)
FILE - Freshly picked bananas float in a sorting pool as they are readied for packing and export at a farm in Ciudad Hidalgo, Chiapas state, Mexico on May 31 2019. (AP Photo/Marco Ugarte, File)
FILE - A member of the Texas delegation holds a sign during the Republican National Convention on July 17, 2024, in Milwaukee. (AP Photo/Matt Rourke, File)
FILE - An array of solar panels float on top of a water storage pond in Sayreville, N.J., April 10, 2023. (AP Photo/Seth Wenig, File)
FILE - Republican presidential nominee former President Donald Trump speaks along the southern border with Mexico, on Aug. 22, 2024, in Sierra Vista, Ariz. (AP Photo/Evan Vucci, File)
MAGDEBURG, Germany (AP) — Germans on Saturday mourned both the victims and their shaken sense of security after a Saudi doctor intentionally drove into a Christmas market teeming with holiday shoppers, killing at least five people, including a small child, and wounding at least 200 others.
Authorities arrested a 50-year-old man at the site of the attack in Magdeburg on Friday evening and took him into custody for questioning. He has lived in Germany since 2006, practicing medicine in Bernburg, about 40 kilometers (25 miles) south of Magdeburg. officials said.
The state governor, Reiner Haseloff, told reporters that the death toll rose to five from a previous figure of two and that more than 200 people in total were injured.
Chancellor Olaf Scholz said that nearly 40 of them "are so seriously injured that we must be very worried about them.”
Several German media outlets identified the suspect as Taleb A., withholding his last name in line with privacy laws, and reported that he was a specialist in psychiatry and psychotherapy.
Mourners lit candles and placed flowers outside a church near the market on the cold and gloomy day. Several people stopped and cried. A Berlin church choir whose members witnessed a previous Christmas market attack in 2016 sang Amazing Grace, a hymn about God's mercy, offering their prayers and solidarity with the victims.
There were still no answers Saturday as to what motivated the man to drive his black BMW into a crowd in the eastern German city.
Describing himself as a former Muslim, the suspect shared dozens of tweets and retweets daily focusing on anti-Islam themes, criticizing the religion and congratulating Muslims who left the faith.
He also accused German authorities of failing to do enough to combat what he said was the “Islamism of Europe.” Some described him as an activist who helped Saudi women flee their homeland. He has also voiced support for the far-right and anti-immigrant Alternative for Germany (AfD) party.
Haseloff said Friday that authorities believed the man acted alone.
The violence shocked Germany and the city, bringing its mayor to the verge of tears and marring a festive event that’s part of a centuries-old German tradition. It prompted several other German towns to cancel their weekend Christmas markets as a precaution and out of solidarity with Magdeburg’s loss. Berlin kept its markets open but has increased its police presence at them.
Germany has suffered a string of extremist attacks in recent years, including a knife attack that killed three people and wounded eight at a festival in the western city of Solingen in August.
Magdeburg is a city of about 240,000 people, west of Berlin, that serves as Saxony-Anhalt’s capital. Friday’s attack came eight years after an Islamic extremist drove a truck into a crowded Christmas market in Berlin, killing 13 people and injuring many others. The attacker was killed days later in a shootout in Italy.
Chancellor Scholz and Interior Minister Nancy Faeser traveled to Magdeburg on Saturday, and a memorial service is to take place in the city cathedral in the evening. Faeser ordered flags lowered to half-staff at federal buildings across the country.
Verified bystander footage distributed by the German news agency dpa showed the suspect’s arrest at a tram stop in the middle of the road. A nearby police officer pointing a handgun at the man shouted at him as he lay prone, his head arched up slightly. Other officers swarmed around the suspect and took him into custody.
Thi Linh Chi Nguyen, a 34-year-old manicurist from Vietnam whose salon is located in a mall across from the Christmas market, was on the phone during a break when she heard loud bangs and thought at first they were fireworks. She then saw a car drive through the market at high speed. People screamed and a child was thrown into the air by the car.
Shaking as she described the horror of what she witnessed, she recalled seeing the car bursting out of the market and turning right onto Ernst-Reuter-Allee street and then coming to a standstill at the tram stop where the suspect was arrested.
The number of injured people was overwhelming.
“My husband and I helped them for two hours. He ran back home and grabbed as many blankets as he could find because they didn’t have enough to cover the injured people. And it was so cold," she said.
The market itself was still cordoned off Saturday with red-and-white tape and police vans every 50 meters (yards). Police with machine pistols guarded every entry to the market. Some thermal security blankets still lay on the street.
Christmas markets are a German holiday tradition cherished since the Middle Ages, now successfully exported to much of the Western world.
Aboubakr reported from Cairo and Gera from Warsaw, Poland. Geir Moulson contributed from Berlin.
A blanket lies on a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Michael Probst)
Policemen guard a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Michael Probst)
Policemen guard a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Michael Probst)
German Chancellor Olaf Scholz, centre, speaks at a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Michael Probst)
Citizens pay tribute to deaths outside St. John's Church near a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noorozi)
Citizens pay tribute and cry for deaths outside St. John's Church near a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noorozi)
A policeman, right, stands on a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Michael Probst)
Citizens pay tribute to deaths outside St. John's Church near a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noorozi)
Two firefighters walk through a cordoned-off area near a Christmas Market, after a car drove into a crowd in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
A damaged car sits with its doors open after a driver plowed into a busy Christmas market in Magdeburg, Germany, early Saturday, Dec. 21, 2024. (Hendrik Schmidt/dpa via AP)
Police stand at a Christmas market in Magdeburg, Germany, early Saturday, Dec. 21, 2024, after a driver plowed into a group of people at the market late Friday. (Hendrik Schmidt/dpa via AP)
Police stand at a Christmas market in Magdeburg, Germany, early Saturday, Dec. 21, 2024, after a driver plowed into a group of people at the market late Friday. (Hendrik Schmidt/dpa via AP)
A damaged car sits with its doors open after a driver plowed into a busy Christmas market in Magdeburg, Germany, early Saturday, Dec. 21, 2024. (Hendrik Schmidt/dpa via AP)
Police officers and police emergency vehicles are seen at the Christmas market in Magdeburg after a driver plowed into a busy Christmas market in Magdeburg, Germany, Saturday, Dec. 21, 2024. (Matthias Bein/dpa via AP)
Security guards stand in front of a cordoned-off Christmas Market after a car crashed into a crowd of people, in Magdeburg, Germany, Saturday early morning, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
A barrier tape and police vehicles are seen in front of the entrance to the Christmas market in Magdeburg after a driver plowed into a busy Christmas market in Magdeburg, Germany, Saturday, Dec. 21, 2024. (Sebastian Kahnert/dpa via AP)
The car that was crashed into a crowd of people at the Magdeburg Christmas market is seen following the attack in Magdeburg, Germany, Saturday early morning, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
People mourn in front of St. John's Church for the victims of Friday's attack at the Christmas market in Magdeburg, Germany, Saturday, Dec. 21, 2024. (Matthias Bein/dpa via AP)
Police tape cordons-off a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
A police officer stands guard at at a cordoned-off area near a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
Police officers patrol a cordoned-off area at a Christmas Market, where a car drove into a crowd on Friday evening, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
Security guards stand in front of a cordoned-off Christmas Market after a car crashed into a crowd of people, in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
Emergency services work in a cordoned-off area near a Christmas Market, after a car drove into a crowd in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
Emergency services work in a cordoned-off area near a Christmas Market, after a car drove into a crowd in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
Emergency services work in a cordoned-off area near a Christmas Market, after a car drove into a crowd in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
Reiner Haseloff, Minister President of Saxony-Anhalt, center, is flanked by Tamara Zieschang, Minister of the Interior and Sport of Saxony-Anhalt, left, and Simone Borris, Mayor of the City of Magdeburg, at a press conference after a car plowed into a busy outdoor Christmas market in Magdeburg, Germany Friday, Dec. 20, 2024. (Hendrik Schmidt/dpa via AP)
Emergency services work in a cordoned-off area near a Christmas Market, after a car drove into a crowd in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
Emergency services work in a cordoned-off area near a Christmas Market, after a car drove into a crowd in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
Emergency services work in a cordoned-off area near a Christmas Market, after a car drove into a crowd in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
A police officer guards at a blocked road near a Christmas Market, after an incident in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
Emergency services attend an incident at the Christmas market in Magdeburg, Germany, Friday Dec. 20, 2024. (Dörthe Hein/dpa via AP)
Emergency services attend an incident at the Christmas market in Magdeburg, Germany, Friday Dec. 20, 2024. (Heiko Rebsch/dpa via AP)
Emergency services attend an incident at the Christmas market in Magdeburg, Germany, Friday Dec. 20, 2024. (Heiko Rebsch/dpa via AP)
A police officer guards at a cordoned-off area near a Christmas Market after an incident in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
In this screen grab image from video, special police forces attend an incident at the Christmas market in Magdeburg, Germany, Friday Dec. 20, 2024. (Thomas Schulz/dpa via AP)
Reiner Haseloff (M, CDU), Minister President of Saxony-Anhalt, makes a statement after an incident at the Christmas market in Magdeburg, Germany, Friday Dec. 20, 2024. (Heiko Rebsch/dpa via AP)
A police officer speaks with a man at a cordoned-off area near a Christmas Market after an incident in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
A policeman is seen at the Christmas market where an incident happened in Magdeburg, Germany, Friday Dec. 20, 2024. (Heiko Rebsch/dpa via AP)
A firefighter walks through a cordoned-off area near a Christmas Market, after a car drove into a crowd in Magdeburg, Germany, Saturday, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
Emergency services work in a cordoned-off area near a Christmas Market, after an incident in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
A view of the cordoned-off Christmas market after an incident in Magdeburg, Germany, Friday Dec. 20, 2024. (Heiko Rebsch/dpa via AP)
A police officer guards at a blocked road near a Christmas market after an incident in Magdeburg, Germany, Friday, Dec. 20, 2024. (AP Photo/Ebrahim Noroozi)
The car that was crashed into a crowd of people at the Magdeburg Christmas market is seen following the attack in Magdeburg, Germany, Saturday early morning, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
Security guards stand in front of a cordoned-off Christmas Market after a car crashed into a crowd of people, in Magdeburg, Germany, Saturday early morning, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
Security guards stand in front of a cordoned-off Christmas Market after a car crashed into a crowd of people, in Magdeburg, Germany, Saturday early morning, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
The car that was crashed into a crowd of people at the Magdeburg Christmas market is seen following the attack in Magdeburg, Germany, Saturday early morning, Dec. 21, 2024. (AP Photo/Ebrahim Noroozi)
Forensics work on a damaged car sitting with its doors open after a driver plowed into a busy Christmas market in Magdeburg, Germany, early Saturday, Dec. 21, 2024. (Hendrik Schmidt/dpa via AP)
