Trump doubles down on tariffs as economists warn of rising consumer costs

President Donald Trump is defending his escalating tariff strategy—even as American consumers begin to feel the pinch.

(CNN)- President Donald Trump is defending his escalating tariff strategy—even as American consumers begin to feel the pinch. Trump announced he is likely to impose new duties on pharmaceutical imports by the end of the month, with rates that could eventually climb as high as 200 percent. He also confirmed plans to implement a 19 percent tariff on goods from Indonesia.

“I think it’s a good deal for both parties,” Trump said, “but we will have full access into Indonesia.”

Meanwhile, the latest Consumer Price Index report shows inflation is ticking up. Prices rose 0.3% from May to June, and 2.7% over the past year. “If you look at inflation and if you look at pricing, it’s gone up very little,” Trump insisted.

But Senator Amy Klobuchar (D-Minn.) disagreed: “Maybe that seems like nothing to him because he’s not going to the grocery store, but for people who are working hard, they are seeing the effects of this.”

Most mainstream economists say tariffs are inherently inflationary—forcing businesses to absorb higher costs or pass them on to consumers. That’s already happening, according to Rick Newman, senior columnist at Yahoo! Finance.

“This is exactly the sort of effect economists have been watching for from the tariffs,” Newman said. And if tariffs continue to rise, so might inflation. Newman warns the U.S. could soon see inflation exceeding 3%, potentially hitting 4%.