Despite Tariff Fearmongering, Inflation Numbers Come in Lower Than Expected

The Bureau of Labor Statistics released its July Consumer Price Index data this morning, showing that inflation rose 2.7 percent on an annual basis—lower than the 2.8 percent economists had anticipated.

Monthly prices ticked up by just 0.2 percent, holding steady amid ongoing economic pressures. Core inflation, which strips out food and energy, came in at 3.1 percent annually, a touch higher than expected, but the headline number tells a clearer story: despite months of dire warnings from the left about President Trump’s tariffs igniting runaway inflation, the figures simply didn’t deliver the catastrophe they predicted.

Critics in the media and Democratic circles have spent the better part of 2025 hammering away at Trump’s trade policies, claiming that tariffs on imports from China, Canada, and other nations would slam American consumers with higher costs across the board. They’ve painted pictures of skyrocketing prices for everything from appliances to apparel, insisting that these measures would undo years of progress on taming inflation. Yet here we are, with the latest report showing inflation not only below forecasts but also cooling slightly from prior trends in key areas. Energy prices dropped 1.1 percent in July, and food costs remained flat, providing real relief to working families.

Even some economists who have been skeptical of tariffs are admitting the impact hasn’t been as severe as feared. Jared Bernstein, a former White House economist under Joe Biden, noted, “The tariffs are in the numbers, but they’re certainly not jumping out hair on fire at this point.”

Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, added, “Inflation is on the rise, but it didn’t increase as much as some people feared. In the short term, markets will likely embrace these numbers because they should allow the Fed to focus on labor-market weakness and keep a September rate cut on the table. Longer term, we likely haven’t seen the end of rising prices as tariffs continue to work their way through the economy.”

Ajay Rajadhyaksha, global chairman of research at Barclays, echoed this sentiment: “You are starting to see tariff impact on the goods side, but it is also true that so far the impact every month has been a little bit less than you would expect. It is very much an inexact science.”

These admissions from experts highlight how the alarmist rhetoric has outpaced reality. Tariffs have indeed affected certain categories—like household furnishings, which rose 0.7 percent—but others, such as apparel and vehicles, showed minimal or no change. Businesses have adapted by stockpiling goods or absorbing costs temporarily, preventing the widespread price hikes that doomsayers promised.

From the White House, Council of Economic Advisers Chair Stephen Miran put it plainly: “What we’ve seen time and again is President Trump has a great track record on these calls. What we’re seeing now, in real time, is a repetition once again of this pattern, where the president will end up having been proven right, and the Fed will, with a lag and probably quite too late, eventually catch up to the president’s view.”

Trump’s tariffs aren’t just about short-term prices; they’re about long-term fairness in trade, protecting American jobs from unfair foreign competition, and bringing manufacturing back home. Studies show that while tariffs may raise some costs initially, they also boost domestic production in protected industries, adding billions in output that benefits U.S. workers.

The left’s fearmongering ignores these benefits, focusing instead on hypothetical disasters that keep failing to materialize. Remember the hysteria over the 2018-2019 trade actions? Economists now acknowledge that those tariffs didn’t derail the economy as predicted, and today’s data suggests history is repeating itself. Inflation remains well below the peaks we saw under the previous administration, and with the Federal Reserve eyeing rate cuts, markets are responding positively—futures rose after the report, signaling confidence in Trump’s economic stewardship.

Many economists have long argued that strong trade policies strengthen America, not weaken it. Today’s numbers prove that point once more, exposing the tariff scaremongers for what they are: partisans more interested in undermining the president than in acknowledging economic resilience. As tariffs continue to level the playing field, expect more good news for American families and fewer excuses from the critics.