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The US government data shows businesses passing on the costs of Trump’s tariffs to consumers, hitting lower-income Americans the hardest.
A person shops for vegetables at a supermarket in Manhattan, New York City. (IMAGE: REUTERS FILE)
Lower-income Americans are feeling the pinch of US President Donald Trump’s sweeping tariffs. The US President has imposed tariffs on several countries, including nations which have strong ties to US, claiming that he wants other countries to stop feeding off the US.
A report by UK broadcaster BBC said that the accelerating inflation, driven in part by tariffs, could worsen the economic divide between haves and have-nots in the US.
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The report, however, did highlight that inflation in the US remains well below its peak and showed, citing government data, that it appears that businesses are passing on the costs of Trump’s import tariffs to consumers.
Yanique Clarke, who said she is a low-income American, told the broadcaster that she finds the prices of meat, vegetable and fruit are “really drastically high”.
“It’s quite a while now, but it’s getting higher,” she was quoted as saying, adding that the prices are “very much higher compared to previous years”.
The price hikes in groceries and clothing items were also reflected in the latest US Labor Department data.
In August, prices for tariff-hit goods went up: clothing rose 0.5% from July, while grocery prices climbed 0.6%, driven in part by a sharp increase in coffee, which is highly sensitive to tariffs.
An economist who worked with the Biden administration said that “lower-income households are almost tailor-made to be exposed to tariffs”. Ernie Tedeschi, who is also the director of economics at the Yale Budget Lab, said: “Those with less disposable income tend to spend more of their budget on imports”.
Corporate leaders are flagging the growing consumer divide. McDonald’s CEO Chris Kempczinski said this month that while wealthier Americans continue to spend, middle- and lower-income customers are under pressure.
A woman buying clothes at a Target store in Manhattan told the BBC that she tends to spend time comparing prices more. “Now I’m doing more price comparison. I’m comparing, is this on sale at the supermarket? But even the supermarket has gotten really expensive,” Nancy Garcia, who works in the publishing industry and identifies as middle-income, was quoted as saying by the broadcaster.
The broadcaster citing US Census Bureau data said that household incomes, adjusted for inflation, rose last year only for the highest earners, while low- and middle-income groups saw no meaningful gains.
It also highlighted a Boston Federal Reserve study released last month that found that lower- and middle-income consumers are carrying more credit card debt than before the pandemic, leaving wealthier Americans to drive much of the spending in the economy.
About the Author
Shankhyaneel Sarkar is a senior subeditor at News18. He covers international affairs, where he focuses on breaking news to in-depth analyses. He has over five years of experience during which he has covered sev…Read More
Shankhyaneel Sarkar is a senior subeditor at News18. He covers international affairs, where he focuses on breaking news to in-depth analyses. He has over five years of experience during which he has covered sev… Read More
Washington D.C., United States of America (USA)
September 16, 2025, 20:41 IST
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