Nicolai Haugsted
Trump tries to reassure Americans about inflation but his explanation leaves him with an uncomfortable question.
Donald Trump has a reassuring prediction for Americans frustrated by higher prices: wait until the war with Iran is over.
The president used an Oval Office appearance this week to argue that inflation would effectively disappear once the conflict ends, tying the country’s price pressures directly to a war his administration chose to launch.
Political commentator David Pakman quickly spotted the uncomfortable part of that argument.
If Trump believes the war is currently helping to drive inflation, Pakman argued, the president is simultaneously acknowledging that a major policy pursued by his own administration is contributing to the economic problem he promises to fix.
“What happens as soon as that war ends? Inflation is going to be eradicated. Totally,” Trump said.
Pakman called the answer “unintentionally revealing.”
Pakman thinks Trump gave away too much
Trump did not explicitly say that the Iran war was solely responsible for inflation.
Still, Pakman argued that the president’s promise established an obvious connection between the two.
“There is an unintentionally revealing element to that answer, because Trump is arguing inflation is because of the war,” Pakman said.
“Well, the war is one that Trump singularly decided to pursue, an optional war, an ill-advised war, a misguided war.”
Pakman’s descriptions of the war as “optional,” “ill-advised” and “misguided” are his political assessments rather than established facts.
His broader point about inflation does have some economic support, although the picture is considerably more complicated than either zero inflation or a single culprit.
The Federal Reserve reported in July that inflation rose sharply after energy prices surged following the start of the Middle East conflict. Its report also found evidence that higher tariffs had contributed to increases in consumer-goods prices.
“He’s acknowledging something his administration is doing is contributing to that problem,” Pakman said. “And so it’s a problem he will solve after he created it.”
Zero inflation is not actually the goal
Trump’s promise to “eradicate” inflation also caught Pakman’s attention for another reason.
“Zero inflation isn’t even the target,” he said.
That part is straightforward.
The Federal Reserve’s longer-term inflation goal is 2 percent as measured by the personal consumption expenditures price index. Persistent inflation significantly below that level is not the central bank’s stated objective.
Trump’s underlying point about the war is easier to defend than the word “eradicated.” Falling energy prices after an end to the conflict could reduce inflationary pressure, but that would not automatically eliminate inflation throughout the US economy.
Trump has another $5,000 promise
Affordability also surfaced elsewhere during Trump’s appearance.
The president again promoted his proposal to give every adult American citizen a $5,000 payment — but attached a rather important political condition.
Republicans must win both the House and Senate.
The White House has promoted the proposal as a “Trump Dividend,” with Trump saying: “If the Republicans win the House of Representatives and the United States Senate… I will issue a dividend to every adult citizen in the United States of America for $5,000.”
Pakman questioned both the financing and the timing.
“He could do it now, if the money is from profits,” he said.
Current estimates put the potential cost above $1 trillion, while the administration has yet to provide a detailed legislative or financing plan capable of demonstrating how tariff revenue would cover the entire bill.
Tariffs also do not function as payments made directly to Washington by foreign governments. US importers pay the duties, and Federal Reserve research has found measurable pass-through into American retail prices.
Canada gets dragged into the conversation
Trump’s remarks did not remain focused on inflation for long.
Canada also received a particularly hostile review from the president, who called the neighboring country “one of the worst countries in the entire world.”
Trump then predicted that Canadian Prime Minister Mark Carney would eventually return to Washington looking for better relations.
“They’re going to come in, and they’re going to say, sir, we are sorry, sir,” Trump said.
“They’ve treated the United States very, very badly.”
Trump also touted his executive order renaming Lake Ontario “Lake America.”
Pakman offered a rather shorter assessment of the significance of the new name.
“It doesn’t mean we own it,” he said.
