Blaming Tariffs Won’t Fix the Cost-of-Living Crisis

Blaming Tariffs Won’t Fix the Cost-of-Living Crisis

BY KENNETH RAPOZA & ANDREW RECHENBERG

Since September, there have been at least six surveys showing a general disagreement with the Trump administration’s tariff policy. The main takeaways are that the public is against the recent, new tariff impositions on Canada – and that tariffs are contributing to the rising cost of living.  That these new polls are coming out during an election cycle is no surprise. But regardless of the timing, tariffs and their impacts on the rising cost of living could use some better explaining. 

The September CPI put prices up 3.7% over the past year. Gasoline is up 34.2%, shelter 3.2%, airfares 22.4%. The slice of the index tariffs actually touch (everyday goods excluding food and energy) rose just 0.7%. There is no tariff on a lease, a hospital bill, or a plane ticket.

Despite this, tariffs are under attack more so than they have been since Trump was elected two years ago this month, with the Wall Street Journal referring to them as “the most hated word in politics” in an article posted Oct. 23.

What are the polls saying?

  • WDIV/Detroit News, Sept. 9: 64.2% oppose Canada tariffs. None of the surveys ask for specific tariffs as Canada is subject to sectoral Section 232 tariffs, as well as the new ones imposed following failed trade negotiations this summer.

  • Marquette Law School, Sept. 16: 30% support tariffs, lower number since Marquette started asking this question in May 2025. Back then it was 37%.

  • Politico/Public First, Sept. 23: 25% support Canada tariffs. Oddly, 75% of Canadians support retaliatory tariffs, seemingly uninterested in the cost of living impacts.

  • Navigator Research/Global Strategy Group, Sept. 22: 60% oppose the Canada tariff policy. Another 57% oppose tariffs globally, with 89% Democrats opposing and 83% Trump Republicans supporting.

  • Marquette Law School, Sept. 30: 70% oppose new Canada tariffs imposed by Trump after the failed trade talks. 65% say tariffs hurt farmers.

  • Echelon Insights, Oct. 20: 65% said the high cost of living and 51% said the war in Iran could cause the Republicans to lose the midterms in the House of Representatives. Some 25% said tariffs. Of note, respondents said ending the war in Iran (74%) was the No. 1 way to lower the cost of living. Tariff elimination ranked fourth, at 65% saying lowering them would “help a lot.”

The International Emergency Economic Powers Act tariffs (IEEPA), what is known more broadly as the Liberation Day tariffs, took a lot of people by surprise in the spring of 2025 because the tariff scope was global, and the high percentage rates seemed sporadic. Soon after announcing them on Apr. 2, the White House opted for a pause until July, then paused again until August. They lasted less than a year due to a Supreme Court decision, were replaced by short term Section 122 tariffs at a lower, global rate of around 10%, then those expired in July 2026 and were largely replaced by Section 301 tariffs under the guise of forced labor protections.

In other words, tariffs were announced, paused for four months, cut in half six months later in late February 2026 when the Section 122 tariffs replaced them, and remained at similar rates – 10 to 12.5% – under the Section 301 regime. 

The New York Fed’s own October study confirms it. Tariffs’ contribution to goods inflation peaked at 2.9 percentage points in February 2026 as a one-time adjustment. Now, according to the Fed, tariffs’ contribution to inflation has fallen to roughly zero by August. Tariffs delivered a brief small step up in the price level. That is behind us, but inflation is not.

Critics argue that the Section 301 tariffs are less about forced labor than about preserving a global tariff regime under a different legal authority. In their view, Washington is finding new ways to keep trade barriers in place rather than returning to freer trade—rewriting, in real time, the U.S. approach to the post–World War II trading system.

Even the European Union faces tariffs under this forced-labor policy. The administration’s justification is not that European manufacturers necessarily use forced labor, but that the EU inadequately prevents goods made with forced labor from entering its market and supply chains. Product exemptions apply, however, so the tariffs do not fall on every EU shipment.

The result can look like a patchwork of legal authorities, country-specific rules, and exemptions. But that complexity should not obscure the direction of the recent changes: tariffs have come down, not continued their relentless march upward. You would hardly know it from surveys of public sentiment about tariffs. Those surveys can leave the impression that duties are rising across the board—from beef and cars to baby blankets. That impression confuses the continued existence of tariffs with continued increases in tariff rates. They are not the same thing.

Beef Prices: Tariffs Are Lower, Imports Rising.

Beef is often a marker, like gasoline, for how consumers feel the inflation pain.  Beef prices have been rising since Covid, and for a variety of reasons, not the least being the New World Screwworm disease in Mexico, a top source of live cattle exports to the U.S.  Those live cattle exports are returning to normal.  The Trump administration, much to the chagrin of ranchers trying to compete with imports, has lowered tariffs and increased duty free import quotas on beef from Argentina and Brazil this year. Tariffs cannot be blamed for higher beef prices.

New Car Prices: Lower Than Inflation Despite Tariffs

European, Japanese, and Korean car imports are subject to 15% tariffs. Every other foreign-built vehicle pays the full 25%. Mexico and Canada cars, which once entered here duty free, also now also face Section 232 tariffs on the non-U.S. content. If the car’s engines, transmission, and onboard electronics were all imported from Asia or Europe, they paid a low 3.5% Most Favored Nation rate to come into the U.S. via Mexico and Canada. 

Those days are gone.

Yet, new car prices are up 1.4% over 24 months vs 5.7% core inflation. Over the last year ending in September, new car prices have risen by 0.6%.  Rolling 12-month inflation is 3.7%.

Geico and Aetna Aren’t Imported

An imported Swiss watch costs more than it used to. But no one needs a Swiss watch. Everyone needs car insurance. Here is a look at the cost of living impacts for car insurance based on some state’s combined average premiums, according to the National Association of Insurance Commissioners (NAIC) 2024 numbers. These are the most recent numbers from NAIC for a single driver.

Geography

2022 combined avg. premium

2024 combined avg. premium

Dollar change

Percent change

United States

$1,257.59

$1,612.81

+$355.22

+28.2%

Massachusetts

$1,256.62

$1,610.84

+$354.22

+28.2%

New York

$1,676.06

$2,149.87

+$473.81

+28.3%

Florida

$1,669.01

$2,174.55

+$505.54

+30.3%

Illinois

$1,080.15

$1,382.89

+$302.74

+28.0%

Texas

$1,469.27

$1,917.05

+$447.78

+30.5%

California

$1,252.41

$1,690.23

+$437.82

+35.0%

This 28% jump in costs happened between 2022 and 2024, entirely before the Liberation Day tariffs existed. Health insurance also adds to the cost of living pressures. KFF, a health policy organization, has measures for state marketplace premiums for an average 40-year old adult. The rates are not surprising.

Geography

2024 benchmark premium / month

2026 benchmark / month

Monthly $ change

Annualized $ change

Percent change

United States

$477

$625

+$148

+$1,776

+31.0%

Massachusetts

$419

$494

+$75

+$900

+17.9%

New York

$736

$817

+$81

+$972

+11.0%

Florida

$489

$683

+$194

+$2,328

+39.7%

Illinois

$473

$646

+$173

+$2,076

+36.6%

Texas

$475

$661

+$186

+$2,232

+39.2%

California

$468

$570

+$102

+$1,224

+21.8%

The Energy Information Administration says the average electricity bill in the U.S. has gone up 9.2% in the last two years, with some states in worse shape. Illinois electricity bills have gone up 22% between August. 2024 and August 2026. 

The above surveys all point to cost of living pressures, with many pundits pointing to tariffs as an added pressure point. But if one were to ask those respondents what was their biggest expense, it would likely be on items impacted by higher commodity prices caused by tensions in the Persian Gulf, and mandatory service fees such as rent and insurance.

Congress and Tariffs

Congress has often complained about the way in which the Trump administration has imposed tariffs. In listening to members during hearings, despite the partisan bickering, their main concern is about the uncertainty of tariff policy. Many see the tariffs as erratic.  

But it is worth noting that very few members of Congress criticize the Section 232 sectoral tariffs. This is true even among members who tend to be free traders.  

In August, California Gov. Gavin Newsom said couldn’t “guarantee” that if he or a Democrat were president that they would roll back President Trump’s tariffs on Canada and elsewhere. If he was being more specific, it is likely he was talking about the 232s rather than tariffs on Canadian beer. 

The United Autoworkers and its leadership support tariffs on passenger vehicles and heavy trucks. 

“We are fighting to end the free trade disaster. Free trade pits workers against each other across borders and is fueled by corporate greed. That’s why we will always support strategic tariffs, including the 232 tariffs on auto and heavy trucks.”

The United Steelworkers Union also supports Section 232 tariffs, though they are open to tweaks. 

The Section 232 tariffs are the crown jewel of the Trump administration’s tariff policy. More are in the works, with an investigation into robotics and industrial machinery announced on Oct. 28. 

Tariffs, coupled with industrial policies, will lead to greater investment in the U.S., and the stated goal of reshoring. U.S. manufacturers and foreign direct investors announced 247,000 manufacturing jobs through reshoring and foreign direct investment in 2025, according to a new report from the Reshoring Initiative.

A Sept. 24 roundtable discussion with eight Republican voters conducted by Echelon deepens the cost of living narrative as it relates to tariffs, and the bigger economic picture.  The takeaway from the roundtable was the cost of living was high, the economy was a problem, but the costs were associated with gasoline, food, utilities and rent.

The squeeze is real, but it is coming from the gas pump, the rent check, and the insurance premium. The Fed’s own economists now put the tariff contribution to goods inflation at roughly zero now. Blaming tariffs isn’t just wrong on the numbers, it distracts the country from the real culprits at the root of the cost of living crisis.

MADE IN AMERICA.

CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.

The latest CPA news and updates, delivered every Friday.

NEWSLETTER

WATCH: WORTH FIGHTING FOR

Get the latest in CPA news, industry analysis, opinion, and updates from Team CPA.