Overview of Today Explained — "Trump can't bring prices down"
This episode (Vox's Today Explained, host Noelle King) examines President Trump's campaign promise to lower prices and whether a president can realistically make life cheaper. Economics reporter Victoria Guida (Politico) and commentator Katherine Rampell (The Bulwark / MSNOW) discuss recent price trends (energy, groceries, housing), Trump administration policies (tariffs, tariff exemptions, proposed dividends and mortgage ideas), political fallout from rising costs, and why large-scale, across‑the‑board price declines are neither simple nor desirable.
Key takeaways
- Despite campaign promises, most consumer prices remain higher since January. Energy, groceries, and housing are the major pain points.
- Trump’s tariff policy has contributed to higher prices on some goods; recent executive actions exempting many food items signal a partial retreat.
- Electricity prices have risen substantially (examples: Maine +26%; New Jersey projected +17–20%); gas is about flat year‑over‑year and lower than earlier in the year.
- Grocery inflation continues: roasted coffee ≈ +21%, round beef ≈ +11.5%, eggs still above last year; many food items remain pricier.
- Housing: rent is still rising (but more slowly); mortgage costs remain high despite modest Fed cuts. A proposed 50‑year mortgage is unlikely to solve affordability and may mainly defer equity accumulation.
- One‑time checks (a proposed “tariff dividend” ~$2,000) would be politically popular but risk re‑fueling inflation if poorly timed.
- Presidents cannot simply "turn prices down" — wide price declines typically reflect economic weakness/deflation, which is dangerous; central banks target modest positive inflation (~2%).
Topics discussed
Policy actions and signals from the White House
- Reimposition and expansion of tariffs earlier in Trump’s term pushed some prices up.
- Recent executive order exempts hundreds of food products from reciprocal tariffs to lower grocery prices.
- Proposed ideas to address affordability: tariff exemptions, a “tariff dividend” (cash payments), and a 50‑year mortgage — each has limits and tradeoffs.
Energy and utilities
- Electricity prices are rising faster than CPI in many states due to aging grids, maintenance costs, and policy choices (reduced investment in certain energy sources).
- Gasoline prices are roughly stable year‑over‑year; large drops (e.g., $2/gal in spring 2020) were tied to pandemic‑driven demand collapse — not a desirable model.
Groceries and food
- Broad food price increases persist; tariffs on agricultural imports can directly increase consumer costs.
- Exempting food from tariffs can lower prices modestly, but not cure underlying supply or input cost pressures.
Housing and mortgages
- Rent increases have moderated partly due to local housing policy and construction, but housing remains expensive.
- Lowering monthly payments via extremely long mortgages reduces monthly cost but delays equity and ownership; it can resemble renting.
Politics and public perception
- Voter memory of pre‑pandemic low inflation helped Trump's credibility on prices; current realities have eroded his economic approval ratings.
- Off‑year election results (Democratic gains in some areas) signaled voter concern about affordability, prompting White House adjustments.
Notable quotes / soundbites
- Trump (paraphrase in transcript): “Groceries are down. Energy is way down. Eggs are way down.” — Claim at odds with data.
- Victoria Guida: “There is no dial under the Resolute desk that allows [the president] to turn prices down.”
- Katherine Rampell: “If you explain to [people] the Fed is targeting 2% inflation and not a negative, none of this is obvious to anyone.”
Why prices don't simply "come down" for good
- Aggregate price declines (deflation) usually accompany severe economic contractions and can trigger spirals where consumers delay purchases, further weakening demand.
- Central banks target modest positive inflation to avoid the costs of deflation and maintain economic stability.
- Many price changes are caused by supply shocks (pandemics, crop diseases, refinery outages) or structural factors (housing supply constraints, aging infrastructure), which require policy and investment to address — not quick political fixes.
Political and economic implications to watch
- Implementation and scope of tariff exemptions: how much will they reduce grocery prices?
- Whether the “tariff dividend” or other cash transfers move forward — and their timing relative to inflation risks.
- Any movement on housing supply policies or meaningful infrastructure/energy investments that could ease utility and housing costs.
- Public opinion trends ahead of the midterms: rising discontent on affordability could shape electoral outcomes.
Bottom line
Trump has limited levers to produce broad, sustained price declines; short‑term moves (tariff exemptions, cash payments) can provide modest relief but carry tradeoffs. Structural solutions — boosting housing supply, modernizing energy infrastructure, stabilizing supply chains — are slower but more effective. Policymakers must balance near‑term political pressures with long‑term economic stability.