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President Donald Trump got elected promising relief for US voters’ pocketbooks. He’s already running into harsh economic reality.
Some Republican lawmakers and CEOs are fretting over sagging consumer sentiment as Trump’s proposed tariffs and federal layoffs stress a system taxed by persistent inflation and a slowing labor market. Stock markets are subdued, and new data shows that people in the US are feeling less optimistic about the economy, with surging expectations of higher prices and fewer jobs.
While GOP leaders — and Trump himself — blame former President Joe Biden for rising prices, thanks to his trio of pricey government stimulus laws, there’s a time limit on that argument. Once Trump fully owns the economy, his party will have to answer for the broader economic effects of his policies.
One of those consequences: The national debt is on track to increase with little chance for reining it back in. As Sen. Rand Paul, R-Ky., put it: “Inflation comes from debt, and so if you add more debt, you’ll get more inflation.”
“There’s a very good chance that what’s going to happen is, you’ll have the persistent inflation — 3 or 4% — but then you can have dramatic things happen,” like the bird flu spiking egg prices, Paul told Semafor. “Tariffs can be an addition on that, and definitely be a problem.”
Trump won’t have to face voters again, but congressional Republicans will next fall. They’re clearly conscious of the need to corral inflation while staving off recession.
Sen. Thom Tillis, R-N.C., facing one of the toughest 2026 reelection races in the country, warned in an interview that “the tariff regimen has to be right, or it’s going to be inflationary.” He added that it’s critical to manage Trump’s proposed tariffs, along with preventing tax increases; otherwise, it could “end up being a very, very difficult cycle for us.”
Tillis expressed confidence that Trump’s newly confirmed US trade representative, Jamieson Greer, would handle any tariffs appropriately. He’ll have an immediate challenge thanks to the president’s Thursday comments threatening higher tariffs next week on Mexico, Canada and China.
On top of that, Trump’s administration earlier this week directed federal agencies to plot further downsizing following the dismissals and buyouts of tens of thousands of workers. Meanwhile, inflation and jobless claims are ticking up.
“The last time consumer sentiment fell, it was falling in a labor market that was one of the strongest we’ve ever seen,” economic policy consultant Kathryn Edwards, previously with the RAND Corporation, said. “Consumer sentiment now is falling in a labor market that is on the precipice. This is a very dangerous combination.”
The administration maintains that its policies, including Trump’s “favorite word” tariffs, will boost the economy. In a speech this week, Treasury Secretary Scott Bessent said America’s economy is “brittle underneath” and the administration’s policy plans will bring down inflation and interest rates.
“Tariffs can increase US industrial capacity, create and protect US jobs, and improve our national security,” Bessent said. He also said they “can be an important source of government revenue.”
Trump’s only been in office a few weeks — far from enough time for the US to reap the benefits he sees coming from tariffs — though Trump said during the campaign he would “immediately” bring down prices. Commerce Secretary Howard Lutnick acknowledged on Fox News Wednesday that returning jobs through tariffs “takes two years, for sure.”
The administration’s parallel efforts to bring down energy costs, like ending the war in Ukraine and rolling back Democratic regulations, will take time. That process is starting: This week Congress cleared a repeal of a Biden-era rule that charged oil and gas companies for their methane emissions.
“I am worried about energy production. I think we have to expand that. If we don’t do that, people are going to find inflation is going to be really persistent,” said Sen. Josh Hawley, R-Mo. “I think the president knows that.”
Trump advisers are also looking to GOP plans for tax cuts and deficit reductions to help ease consumers’ economic burden.
White House spokesman Kush Desai said lingering inflation stems from “the Biden administration’s nonsensical economic policies and runaway spending, adding that “President Trump built the greatest economy in American history during his first term, and he’s due to repeat the magic again in his second term.”
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Rep. Scott Fitzgerald expects Trump to announce soon an outline of what his administration is doing to lower prices, including on energy, monetary policy, and the labor market. The Wisconsin Republican has already been hearing concerns from employers in his district about how tariffs on Canada could affect their ability to source the steel and aluminum they need.
“They’re kind of trying to figure out what are the changes that Trump’s going to make now, and [whether] that could once again have an effect on their businesses,” Fitzgerald said.
The economic ramifications of Trump’s tariffs and layoffs are a core challenge for Republicans who want to enact Trump’s tax agenda without ballooning the deficit. House Speaker Mike Johnson returned from a Wednesday meeting with Trump and proposed tariffs, federal layoffs, and a new GOP plan to let noncitizens purchase a green card for $5 million as revenue sources.
It’s not clear how much revenue those would bring in. And not everyone is bought in.
“I’m not the biggest fan of depending on [tariffs] for revenue,” said Rep. Adrian Smith, R-Neb., who chairs the House Ways and Means Committee’s trade panel. “We are doing tax reform — continuing what we did in 2017 — because it’s proven to be a good thing.”
He added that “the cost to consumers is something we’re talking about, and we need to be mindful of that.”
The View From Democrats
Congressional Democrats want to capitalize on the growing turmoil within the GOP as Trump’s economic policies put members of his own party on edge.
“There’s probably some very challenging conversations, because a lot of these guys understand that it’s going to tick up inflation — that automobiles are going to be more expensive — and I think they understand that that’s not a good thing for the president,” Rep. Jim Himes, D-Conn., said.
Eleanor, Burgess and Shelby’s View
Republicans are getting more candid about the potential economic downside of Trump’s policies. That’s a long way from openly critiquing him over them.
But the fact there’s any daylight just five weeks into the administration — when GOP lawmakers are largely unwilling to break from him on any other front — may betray deeper fault lines to come.
Consider that most of Trump’s proposals are still conceptual. The tariffs haven’t gone into effect, many agencies haven’t executed deeper spending cuts, and GOP policymakers are still optimistic about cutting taxes without growing the national debt.
The stress could increase when those policies become real.
Notable
- Sen. Ted Cruz, who chairs the Senate Commerce Committee, said Thursday he’s “hopeful we will not see tariffs” go into effect against Mexico and Canada, per Politico.
- The Trump administration is weighing using money saved from DOGE to pay down the federal debt — and possibly giving money back to Americans, according to The Hill.