Trump wants to tackle inflation. Will these top actions bring prices down?

Many Americans say they voted for Donald Trump because he promised to defeat inflation.
So it’s no surprise that Trump’s first actions included directives aimed at “emergency price relief” for housing, food, gas and other basics, which remain up by double-digit percentages from 2019. He ordered government officials to roll back regulations and claw back climate-related policies in hopes of slashing costs.
But just how much can the president do? And which of his proposals are most likely to make a dent in inflation?
“The reality is, inflation of the type we have gets embedded into the economy and takes a long time to wring out,” said Douglas Holtz-Eakin, president of the American Action Forum, a conservative think tank. “There aren’t many quick solutions.”
For Americans antsy for quick relief, here’s what we found.
Immigration crackdowns, deportations
Trump has promised dramatic shifts in immigration policy, with nearly a dozen executive orders aimed at securing national borders, removing undocumented workers and limiting new immigration. He declared a “national emergency” on the U.S.-Mexico border and has signaled that he will move quickly in deporting thousands, if not millions, of immigrants.
Although Trump has said the sweeping crackdown would bring down inflation – by reducing demand for housing and jobs – economists say it’s unclear that’s how things will shake out. Curtailing immigration and deporting crucial workers could actually end up lifting prices for necessities such as housing and food.
Deportations are likely to rock industries such as agriculture, hospitality and construction, which rely on an outsize number of undocumented workers, and they could translate into higher food and housing costs, said Satyam Panday, chief U.S. economist at S&P Global Ratings. A broader slowdown in immigration, meanwhile, could mean tech and health care companies have a harder job finding workers, forcing them to raise wages, which could reignite inflation in those areas .
“Given the moving parts, there’s no straight answer to this,” Panday said. “But from what we know, it does probably point to an inflationary outcome.”
Bottom line: Could increase inflation.
New tariffs and trade policies
For months now, Trump has talked about imposing sweeping tariffs on imports, with penalties for goods from China, Mexico and Canada. This week, the administration doubled down on its “America first” message and signaled that new tariffs could take hold as early as next week.
Trump says foreign nations pay these fees, but data from past tariffs show companies end up paying them and passing those costs to consumers. Indeed, Trump said in December he doesn’t believe tariffs will result in higher prices, but he added he “can’t guarantee” they won’t end up raising costs.
As a result, manufacturers and retailers are loading up on extra inventory and preparing price hikes to guard against new costs. Once tariffs hit, many economists expect a one-time increase in a number of imports, including food, electronics and building materials. Items made in the United States could be affected too, since many companies rely on materials from abroad.
“As soon as the tariffs hit, you’re going to start seeing price hikes on just about everything coming across the border – avocados, lumber, Canadian maple syrup,” said Kimberly Clausing, a professor at UCLA Law and former Treasury Department economist. “There is going to be a very direct hit to the consumer.”
Bottom line: Could increase inflation.
Expanding oil and gas drilling, other energy overhauls
Americans are uniquely attuned to gas prices, and this is an area where economists say the president might be able to bring down costs.
Gas prices, hovering around $3.10 a gallon, are markedly lower than they were a couple of years ago. Trump’s plan of “unleashing American energy” may coax them down further, economists said, though it’s unclear just how quickly or dramatically that might happen.
“Maybe gas and oil will get a little cheaper, and that’s something people would notice,” said Holtz-Eakin of the American Action Forum. “But we’ve already seen global gas prices come down in a big way in the last year, and I don’t know that they can get a whole lot lower.”
Other economists, though, said they expected swift price drops. Just the very suggestion that the new administration is doubling down on oil and gas drilling could be enough to bring down costs, said Yuriy Gorodnichenko, an economics professor at the University of California at Berkeley. It might take another year, he said, before those lower energy costs show up in other goods that rely on oil and gas.
Bottom line: Could reduce inflation.
Rolling back regulations
The Trump administration has maintained that slashing regulations, particularly related to the climate, would lower the cost of housing, appliances and other items. Trump this week called for a federal freeze on new regulations and is asking agencies across the government to look for ways to reduce “crushing regulatory burdens.”
Economists say some of those actions are likely to result in lower costs to households and businesses.
“The track record for the first Trump administration on regulatory costs was spectacular, and if they do that again that would take a lot of costs out of the equation,” Holtz-Eakin said. “That’s qualitatively the biggest thing they could do to lower costs.”
Some cautioned, however, that although a rollback in regulations may save money in the short term, it could make things pricier in the future if too many corners are cut.
“Getting rid of some of these regulations can be extremely costly later, when there are a bunch of environmental impacts, or another train crashes because there aren’t proper safety regulations in place,” said Jonathan Ernest, an economist at Case Western Reserve University. “Although some regulations are inefficient, others are fully necessary – we need safety requirements, we want to make sure everybody’s playing on a fair field.”
Bottom line: Could reduce inflation.
Undoing efforts to lower prescription drug prices
In addition to rolling out dozens of his own directives, Trump’s first actions have also included undoing some of the Biden administration’s more consequential efforts. On Monday, for example, the new president ordered the rollback of a 2022 executive order that sought to lower prescription drug costs for Americans.
But experts say that doesn’t mean drug prices will shoot up, at least not just yet.
The executive order in question required the Secretary of Health and Human Services to draft a plan for lowering drug prices. That’s already been done, and some ideas from that effort – including a $2 cap on popular prescriptions for Medicare beneficiaries – are well underway, said Stacie Dusetzina, a professor of health policy at Vanderbilt University School of Medicine.
Trump’s undoing of the executive order doesn’t slash those programs, though “it may indicate his intent or interest” in eventually doing so, she said. Some Republican plans, including the Heritage Foundation’s Project 2025, have called for nixing drug price negotiations that were codified under Biden’s Inflation Reduction Act, though that would require support from Congress.
“So far, (Trump’s) actions are more symbolic than consequential,” Dusetzina said, adding that rescinding the executive order “is unlikely to change anything directly.”
Bottom line: Not likely to affect inflation.
Lowering interest rates
Trump’s rollout continued Thursday with a “demand that interest rates drop immediately.” Economists said doing so would reignite inflation, requiring even higher interest rates down the line.
The president has no power over borrowing costs, which are set by the Federal Reserve, an independent entity chaired by Jerome H. Powell. The Fed began raising interest rates in 2022, after a burst of pandemic-related inflation. Since then, it has cut rates but has signaled it is waiting for more progress on inflation. Housing costs have remained particularly elevated, and many economists fear that new tariffs and tax cuts could further stoke inflation in the coming months.
“The Fed is still trying to get that last bit of inflation down,” said Claudia Sahm, chief economist at New Century Advisors and a former Federal Reserve economist. “If they cut rates before it’s the right time, there’s going to be an even bigger problem on our hands.”
A sudden drop in rates, she said, would lead to a burst of spending by businesses and households. Companies would make bigger investments, and Americans would flood into the housing market. As a result, prices would quickly spike.
“There are no shortcuts here,” Sahm said. “The last thing you want to do is stoke inflation again.”
Bottom line: Could increase inflation.