Donald Trump Reacts to Rising US Prices After Announcing Reciprocal Tariffs

President Donald Trump said Thursday that prices of some goods "could go up somewhat short term" after rolling out reciprocal tariffs, his plan to increase U.S. tariffs to match the tax rates that other countries charge on imports.

Why It Matters

Trump's Republican administration has maintained that its new tariffs are intended to level the playing field for U.S. and foreign manufacturers. However, under current law, these tariffs would likely be paid by American consumers and businesses, either directly or through increased prices.

Before the announcement, food prices saw an upward trend this month, with several key grocery items experiencing noticeable increases.

What To Know

Trump signed an executive order about reciprocal tariffs for countries currently charging the U.S. on Thursday. A tariff is often used to protect domestic industries. It is a tax on imported goods and is typically paid by the importing business, which may then pass the cost onto consumers through higher prices.

The executive order focused on the "unfair practices and limited access" workers and industries in the U.S. have had to foreign markets. In response, the U.S. is going to "reduce our large and persistent annual trade deficit in goods and to address other unfair and unbalanced aspects of our trade with foreign trading partners."

"There could be some short-term disturbance, but long term it's going to make our country a fortune," Trump said. "No one really knows what's going to happen other than we know jobs are going to be produced at levels that we have never seen before."

Trump was asked after the announcement, "Who do you think voters should hold responsible?" if prices of goods increase at U.S. shops and stores.

"I think what's going to go up is...jobs are going to go up and prices could go up somewhat short term, but prices will also go down. I think the farmers will be helped by this very much."

He said the inflation will go down "hand in hand" with the tariffs.
Trump also said additional US jobs will be created as a result of the tariffs. He added that the farmers and manufacturers "are going to be helped."

He was asked if the reciprocal tariffs' impact on U.S. pricing would be studied, but the president retorted that "there's nothing to study."

"This is something that should've been done many years ago," Trump said. "Ultimately, prices will stay the same or go down, but we're going to have a very dynamic country."

What People Are Saying

President Donald Trump at the press conference: "I think our country is going to be flooded with jobs."

The executive order on reciprocal trade and tariffs: "The United States has one of the most open economies and has among the lowest average weighted tariff rates in the world. The United States imposes fewer barriers to imports than other major world economies, including those with similar political and economic systems. For many years, the United States has been treated unfairly by trading partners, both friend and foe. This lack of reciprocity is one source of our country's large and persistent annual trade deficit in goods -- closed markets abroad reduce United States exports and open markets at home result in significant imports."

What's Next

Under Trump's "Fair and Reciprocal Plan," his administration will "work strenuously to counter non-reciprocal trading arrangements with trading partners." The Secretary of Commerce and the United States Trade Representative are set to head the "necessary actions. to investigate the harm to the United States from non-reciprocal trade arrangements adopted by any trading partners."

Trump is set to meet with Prime Minister of the Republic of India Narendra Modi later today, and trade is expected to be a topic of discussion.

Update 02/03/25 3:48 p.m. ET: This article has been updated with additional information.