The White House's inflation control strategy is based on patriotism and prioritizing domestic goods, according to economic adviser Kevin Hassett.
The American people are increasingly choosing to buy domestic products, helping to curb the rise in import prices despite high tariffs under President Trump's policy.
MAIN CONTENT
Patriotism drives American consumers to prioritize domestic products, reducing inflationary pressure.
Import prices have decreased thanks to partner countries absorbing the tax cost, not passing the prices onto American consumers.
Despite the risk of future price increases, the market remains temporarily stable as citizens and investors are skeptical about the impact of tariffs.
Why does the 'buy American' strategy help reduce inflationary pressure?
Kevin Hassett, Director of the U.S. National Economic Council in 2025, emphasized that the shift in consumption to domestic products is a key factor in helping to curb inflation. According to him, when people prioritize American goods, import prices decrease even though import tariffs increase.
Specifically, from December to May, import prices decreased instead of increasing, which was unexpected when the government imposed strong tariffs under Trump. This is evidence of the effectiveness of 'economic patriotism', contributing to reducing the burden of rising costs for consumers.
Patriotism is not just an ideal, but also a practical measure to stabilize the economy in the context of trade tensions. Americans prefer their products more than ever.
Kevin Hassett, Director of the U.S. National Economic Council, 2025, CNBC
How do American consumers actually avoid imported goods?
Kevin confirms that the demand for imported goods has sharply decreased, causing prices of these items to drop despite the tariffs. This is part of the 'conspiracy' to reduce inflation that the U.S. government is leveraging.
He also emphasized that countries like Mexico, China, and Canada accepted the tax cost damage, not passing the burden onto the United States, which has never happened before and reduces concerns about immediate price increases.
Economic expert analysis of import data and tariffs
Economist Ernest Tedeschi from Yale warns that the White House's method of calculation may underestimate the impact of tariffs. Data from the Harvard Price Lab shows that import prices increased from March when new tariffs were applied.
The situation of businesses stockpiling inventory before the tariffs are applied also prevents prices from rising sharply, but the risk of price increases remains in the long term.
How is the market reacting to the new tariffs from the United States?
Although President Trump announced a 30% tariff on the European Union and Mexico starting August 1, the financial market remains stable, reflecting confidence that trade negotiations will continue and minimize damage.
The Dow Jones index rose slightly by 28 points (0.1%), and the S&P 500 and Nasdaq also had similar increases after this announcement. This shows that investors are cautious and expect tax policies to be adjusted in a timely manner.
I believe that if there is a valid reason, the president has the right to replace Federal Reserve Chairman Jerome Powell to protect national interests.
Kevin Hassett, White House economic adviser, spoke on ABC News, July 2025
Pressure from the White House to the Federal Reserve
The White House has begun to closely examine the costs of repairing the Fed headquarters in Washington D.C., a sign that the government may use pressure tactics on the Fed amid trade tensions and inflation.
Comparison table of the impact of import taxes on several countries
Country Tax Rate Applied (%) Impact on Import Prices Tax Cost Absorbed by Mexico Fluctuation, up to 30% Slight increase in import prices Government and businesses of Mexico China About 25% Decrease in initial import prices Chinese businesses, not yet passed on to American consumers European Union 30% (planned application) No official data Negotiating to reduce the tax rate
Frequently Asked Questions
Why haven’t import prices increased despite high tariffs? American consumers are switching to domestic purchases and partner countries are absorbing tax costs, not passing the prices onto buyers. What impact does the 'buy American' strategy have on the economy? It helps reduce inflationary pressure by lowering demand for imports, boosting domestic production. Will commodity prices rise in the future due to these tariffs? There may be long-term price increase risks when the effects of stockpiling and tax delays wear off. How did the financial market react to the new tariffs? The market maintained a calm attitude and expected negotiations to mitigate negative impacts. How does the White House plan to control the Fed? The White House is considering pressure through cost assessments and emphasizing the possibility of replacing the Fed chairman if necessary.
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