Donald Trump’s Allies Are Preparing Americans for Higher Prices if He Wins

Donald Trump’s allies are warning Americans that a second Trump term could come with some initial financial adjustments and higher prices.
Trump has built his campaign on his economic policies, promising that everyday Americans would face tax cuts and less inflation under his administration. However, in recent weeks, there has been talk of a Trump presidency bringing higher prices for Americans, although the former president’s supporters say these costs would be temporary in nature.
“We have to reduce spending to live within our means,” billionaire and Tesla co-founder Elon Musk said during a town hall event on X. “And, you know, that necessarily involves some temporary hardship, but it will ensure long-term prosperity.”
Musk, who is slated to be the head of a “Department of Government Efficiency” in a new Trump Cabinet, has said his cuts to the government budget would take away $2 trillion and, initially, Americans could feel this hit on their wallets.
Even social safety net programs such as Social Security and Medicare could be in jeopardy if the cuts Musk is proposing get underway, experts say.
Despite such comments from Musk and others, Trump has appeared to double down, saying that Americans will not be impacted by any cost pressures if he becomes president again.
Trump still called Musk a “very exceptional guy” and a “great cost-cutter” during an interview with Sean Hannity on Tuesday.
“He’ll cut costs without anybody even knowing it—nobody’s going to notice—nobody is going to feel it,” Trump said of Musk’s plan to cut $2 trillion from the government’s budget.
However, a group of 23 Nobel Prize-winning economists banded together and wrote that a second Trump presidency would “lead to higher prices, larger deficits, and greater inequality,” in a letter this month.
Cantor Fitzgerald CEO Howard Lutnick, who is a co-chair of the Trump-Vance 2025 transition team, also said the tariffs Trump plans to bring in would immediately lead to higher prices in the short term.
“Correct: If I raise the tariff on just this particular idiosyncratic product, yes, right, it will be more expensive,” Lutnick said in an interview on CNBC’s Squawk Box last week.
Trump’s running mate, JD Vance, also acknowledged this reality during an August interview on NBC’s Meet the Press.
“Anything that you lose on the tariff from the perspective of the consumer, you gain in higher wages, so you’re ultimately much better off,” Vance said.
Tariffs, simply put, are a tax on consumers, said Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group.
“Trump may argue that we can produce more domestically, but U.S. companies would likely raise prices to match the new market rate and maintain their profit margins,” Thompson told Newsweek.
During Trump’s previous administration, tariffs on Chinese goods increased, but a Republican sweep could lead to even more tariffs on imports.
“Higher prices would add pressure on American consumers who are already grappling with elevated costs for essentials like food and services,” Thompson said. “While the aim of tariffs is often to boost American jobs, these jobs may come with higher wages, which in turn could raise prices further.”
Robert Shapiro, a political science professor at Columbia University, said many supporters may decide they do not care about higher prices because the tariffs could protect jobs and get rid of undocumented immigrants.
“Given current complaints about high prices, even with price increases dropping, it suggests that people will feel the increases in prices from Trump’s policies. But Trump will not be running for reelection, so he has no reason to care and is more concerned about cutting other taxes and regulation to promote growth, even with very high price increases,” Shapiro told Newsweek.
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, said previous attempts to levy tariffs over the past few decades have not produced the return many expect.
“The reason they’re ordinarily unsuccessful in our global economy is the amount of revenue they bring in is incredibly small compared to overall federal revenue, the amount of jobs the tariffs produce aren’t sizeable compared to other means of economic investment by the government, and—most importantly—these costs usually get passed on to the consumer,” Beene told Newsweek.
“Tariffs may sound good to voters as a way of making other entities ‘pay their fair share,’ but the reality is it normally equates to the consumer paying more.”