Consumers won’t be the only ones feeling the pain if price pressures are reignited under Trump.
by Nir Kaissar
Bloomberg.com
If you want a glimpse of the looming tug of war between US corporations and consumers over prices, look at the drama unfolding at McDonald’s Corp. The fast-food icon raised prices in response to the spike in post-pandemic inflation only to discover that a broad swath of Americans can no longer afford Big Macs. Now it’s rolling back some of those price hikes.
McDonald’s story may become a familiar one if tariffs and deficits stoke inflation as many expect. Last week, Donald Trump threatened additional tariffs on China and new ones on Mexico and Canada. He also wants to extend his 2017 tax cuts due to expire next year and add new reductions, which would likely result in trillions of dollars of fresh deficits. If those plans materialize and push inflation higher, someone will have to pick up the tab. Companies shouldn’t assume it will be consumers, as McDonald’s has discovered.