Trump tariffs begin to cause inflation in the USA

The New York Times story shows that American inflation accelerated in July, amid pressure from tariffs, and companies begin to pass consumer costs

The pace of inflation in the United States gained strength in July, driven mainly by an increase in the so -called “core” of the consumer price index (IPC) – a measure that excludes food and energy, items known for volatility. The data, released by the Department of Labor Statistics, reveal that the inflationary scenario is beginning to feel more obviously the impact of the tariffs imposed by President Donald Trump.

The General IPC kept up 2.7% compared to July last year. In the accumulated month, there was a 0.2% advance compared to June. Already the core of inflation, considered a more faithful thermometer of the price trend and closely accompanied by the Federal Reserve, advanced 0.3% in July, accumulating up 3.1% in 12 months. This is one of the largest monthly variations of the year and the fastest annual growth recorded in the last five months. In June, the nucleus had risen 0.2% in the month and 2.9% in the 12 -month accumulated.

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According to economists, the movement reflects the difficulty of companies in absorbing the additional costs imposed by tariffs, especially on imports. “The economy is weaker because of tariffs,” said Stephen Stanley, Santander’s chief economist for the US. “The companies are very cautious. They are not investing and are not hiring,” he said, adding that the consumer also feels the weight of the highest prices and begins to reduce spending.

Since April, all imports have paid a 10%rate, as well as additional taxes on steel, aluminum and products from China and Canada. Some more severe rates came into force only in early August, so they do not appear in July data yet. So far, many companies have resorted to preventive stocks and cost absorption to avoid passing increases, but the latest numbers indicate that this strategy is reaching the limit.

The service sector recorded, in July, the largest monthly advance in the year – considering values adjusted by the exclusion of energy costs. Among the segments most affected by tariffs and which presented prices are mobile, appliances, recreation items and footwear.

The domestic furniture rate rose 0.7% in the month, after a 1% increase in June, accumulating 2.4% in one year. Recreation products increased by 0.4%. Already the clothing for babies and young children recorded a jump of 3.3% in July, while the price of shoes advanced 1.4%.

For Stanley, the pressure is inevitable: “Tariffs are high enough that sooner or later most sectors have to increase prices. It’s just a matter of when and how to do it.”

Despite the advance, the July result came within market expectations, which makes room for the Federal to reserve to keep his plans to cut back the basic interest rate – a movement interrupted since December.

Airline tickets are triggered and pressure on consumers increases amid the uncertain economic scenario

July data show that air transport was one of the highlights in the month. The tickets climbed 4%, reversing a sequence of falls registered in the previous months. However, hosting costs remained contained, with virtually stable hotels expenses.

In the automotive sector, automakers had been holding prices to protect consumers from the tariffs imposed by President Donald Trump, immediately avoiding the increase in costs. But this posture began to change. In July, used car prices and trucks advanced 0.5%, while new vehicles remained stable.

One of the few forces acting to contain inflation was the sharp drop in energy prices. The general index of the sector retreated 1.1%, especially gasoline, which was 2.2% cheaper. This retraction helped to partially compensate for increases in other areas.

Still, the scenario for the American consumer is cautious. With hiring slowing in recent months and negative revisions in employment numbers – in May and June, 258,000 previously accounted for statistics have been taken from the statistics – many families are more selective on how to spend. “The consumer is unable to go shopping and pay higher prices,” said Nancy Lazar, Piper Sandler’s global chief economist, noting that the real inflation-adjusted income has stagnated.

Although companies still avoid large -scale staff cuts, economists warn that if tariffs continue to corrode profit margins, cost driving can become inevitable.

The picture creates a dilemma for the Federal Reserve. Monetary authority needs to balance two goals that now walk in opposite directions: contain inflation, which gives acceleration signs, and prevent deeper weakening from the labor market. Since the beginning of the year, the Fed has maintained stable interest rates, awaiting more clarity on the impacts of Trump’s trade policy.

This posture, however, has attracted increasing criticism from the president. On Tuesday, Trump directly attacked Jerome H. Powell, president of the Central Bank, and the council of governors, calling him a “loser” and accusing him of causing “incalculable” damage to the US economy.

Trump expands offensive against the Federal Reserve and promotes strategic changes before decisions on interest

The tension between the White House and the Federal Reserve has gained new chapters this week. President Donald Trump threatened to open what he called the “important” process against Fed President Jerome Powell, harshly criticizing the reforms in progress at the Central Bank headquarters in Washington. According to him, the project represents a waste of resources and became one of the main targets of its wrath, especially in view of the Fed resistance to cut interest rates throughout this year.

Last week, Trump announced that he would appoint a temporary governor to occupy an unexpected vacancy on the Fed Council, responsible for voting interest rates at all monetary policy meetings – the next scheduled for September. The position was open after Adriana Kugler announced her departure before the end of the term, scheduled for January.

For the post, the president chose Stephen Miran, a longtime critic of the Fed and former president of Trump’s Economic Advisers Council. On Tuesday, Miran stated that the latest data “showed no evidence” that tariffs would have driven prices, contrary to analyzes from various economists. “It just didn’t work,” he said.

Miran, who still has to go through the Senate confirmation, would add to a council that begins to show internal divisions about the right time to resume interest cuts. Two members previously nominated by Trump has publicly defended the immediate reduction of rates. Powell himself admitted this summer that, it was not for the inflationary pressure caused by tariffs, the Fed would probably have reduced loan costs.

The July Inflation Report has also marked the first relevant economic disclosure of the Department of Labor Statistics since Trump dismissed the agency’s head Erika McNTAFER. She had commanded the agency since 2024 and was dismissed after the release of a weaker than expected job report. The president claimed, without presenting evidence, that McTaFerfer would “manipulate” hiring numbers in the federal government to harm him politically-a prosecution harshly coupled by economists and public data experts, who warned the risks of weakening the credibility of historically independent and reliable statistics.

In her place, Trump indicated EJ Antoni, economist at the conservative Heritage Foundation and a declared critic of the Bureau of Labor Statistics. The choice reinforces the political turn in conducting technical bodies and adds another point of tension to the already delicate balance between economic data, monetary policy and electoral scenario.

With information from New York Times*