MW Why Trump's bid to bring down beef, coffee and banana prices may not help Americans where they're hurting the most

Andrew Keshner

The bottom-line results of the Trump administration's latest moves may be more 'politically impactful than practically impactful'

President Donald Trump says his administration is ending an affordability crisis, but economists say there are a lot of high prices to tackle.

As Americans face mounting affordability challenges, President Donald Trump is targeting the grocery store in his latest efforts to lower the cost of living.

Food prices matter deeply for consumers' wallets and their mood, economists say. Yet the expenses that are really gnawing at household budgets are far from the supermarket: They include housing, healthcare and insurance costs, all of which have tightened their squeeze on people's budgets over the past year.

On Monday, Trump touted lower prices for staples such as eggs and bread as he spoke to McDonald's $(MCD)$ franchise owners. "The Biden administration started the affordability crisis and my administration is ending it - I'm ending it. Prices are way down," Trump said.

His comments were the latest in a renewed effort to focus on affordability issues, which were front and center in the 2024 presidential election and which helped propel Democratic wins in elections on Nov. 4, including Zohran Mamdani's successful campaign for New York City mayor. Mamdani sailed to victory on pledges to freeze rent and lower the city's high costs; one of his ideas is city-run grocery stores offering low prices.

In the wake of those election losses for Republicans, Trump has directed new attention to the cost of living, most notably by rolling back tariffs on grocery items including beef and bananas. Trump's speech came days after trade deals with several Latin American countries, featuring tariff rollbacks that could also relieve price pressures on everyday goods like coffee. Trump said Monday that the beverage's cost would decrease, too.

Between those tariff carve-outs and a U.S. trade deal with Switzerland, the effective tariff rate would tick lower to 12.8%, according to analysts at Oxford Economics on Tuesday.

The reductions offer a bit of help for cost-conscious consumers, Nancy Vanden Houten, lead U.S. economist at Oxford Economics, told MarketWatch. The latest trade deals "grabbed a lot of headlines and maybe it results in some easing of prices at grocery stores, but it's not going to turn around the broader affordability issues many households are facing."

Exhibit A: The cost of buying and owning a home these days. The median home price hit a record high of $435,300 in June, according to the National Association of Realtors. The share of monthly income needed to make a mortgage payment on an average-priced home has hovered around or above 30% since mid-2022, according to Intercontinental Exchange.

Homeowners have contended with stubbornly high prices and mortgage rates between 6% and 7% in recent years - a borrowing cost Trump has insisted is way too high. He's floated the idea of a 50-year mortgage to shave monthly payments, but critics have doubts about that idea.

Insurance costs also deeply pinch Americans. For homeowners, average property-insurance costs were up more than 11% in the past year, Intercontinental Exchange data showed. Those expenses have popped more than 70% over the past five years.

Hikes to car owners' insurance premiums have moderated, but only after surges in 2023 and 2024. Meanwhile, the average new-car price surpassed $50,000 for the first time ever in September, and the affordability of a new car slipped for the third straight month in October, according to an index from Cox Automotive and Moody's Analytics.

Read also: The average new car price just surged past $50,000. How to shop for a loan so you don't end up underwater.

Health coverage is yet another pressure point. Employer-sponsored plans - where most Americans get their health insurance - are projected to see sharp increases next year. Millions of people could face noticeably higher 2026 premiums if they buy health insurance through Affordable Care Act marketplaces.

Vanden Houten is expecting "resilient" wage growth looking ahead - but there's only so much that can do to help keep up with rising insurance premiums or electric bills, or to "alleviate unaffordable home-buying circumstances," she noted.

To be sure, there has been some relief for consumers: Inflation rates hit four-decade highs at one point during President Biden's term, peaking at 9% on an annualized basis in June 2022. In September - the latest month for which data are available - the year-over-year inflation rate was 3%. In his speech, Trump said he wants to push inflation even lower.

Eggs prices are roughly half what they were earlier this year. A dozen eggs averaged $3.48 in September, according to the Bureau of Labor Statistics - down from $6.22 in March, when factors like avian flu and production costs contributed to record-breaking prices.

And a gallon of gas averaged $3.09 on Wednesday, according to AAA. That's essentially unchanged from a year ago, and it's far below the $5.01 record in June 2022.

Across the globe, rising prices have been a headwind to political incumbents for several years, said Tim Quinlan, senior economist at Wells Fargo.

Presidents are generally constrained in what they can do to address an elevated cost of living. Before dropping out of the 2024 presidential race, Biden touted a $10,000 tax credit for home buyers, bids to end "junk fees" and other pocketbook-focused programs. As the Democratic presidential candidate in 2024, former Vice President Kamala Harris vowed to ban "price gouging" at grocery stores.

The bottom-line results of the newest Trump administration deals may be more "politically impactful than practically impactful," Quinlan said. Shoppers are extra sensitive to the prices they constantly see, like food and gasoline costs, he noted.

It's not that consumers haven't coped with higher food prices - they have, Quinlan emphasized. "The money we spend at a grocery store looms much larger in our mind than that it does as a share of spending," he said.

The sting of a higher health-insurance premium may lessen when payment is set on auto-pay, he said, while a bigger car loan may feel more manageable when it becomes a fixed, recurring expense. But a surprise on higher-priced food "consumes your frustration in an environment of affordability," Quinlan said.

"Cleaning up Joe Biden's inflation and economic disaster has been a top focus for President Trump since day one, when he signed an array of executive orders to unleash American energy and slash costly regulations," White House spokesman Kush Desai told MarketWatch.

In a recent move, the Trump administration announced deals with drugmakers Eli Lilly $(LLY)$ and Novo Nordisk (NVO), which make popular but pricey GLP-1 weight-loss medications. Desai said the deals will "unlock unprecedented healthcare savings for everyday Americans."

In all, Desai added, the administration "will continue to implement and emphasize these and other economic policies that are cutting costs, raising real wages and securing trillions in investments to make and hire in America."

Trump and congressional Republicans have repeatedly said the new tax breaks and deductions in their One Big Beautiful Bill Act enacted in July should produce slimmer tax bills and fatter refunds. The IRS could pay up to $370 billion in individual income-tax refunds on 2025 returns, according to Piper Sandler research. Through mid-October, the tax agency had paid $311.6 billion in refunds on 2024 returns.

On Monday, Trump said he'd keep the focus on the cost of living. "My pledge to every family and every small business is that I will not rest until you are richer, stronger, more successful, happier. Until you've gotten a piece of the American dream," he said.

A lack of affordability has become a barrier to that aspiration of a better life, according to MarketWatch research and interviews.

Trump has his work cut out for him on major affordability hurdles like housing and insurance costs, said Vanden Houten. "There's not that much on the horizon in terms of these costs that suggest real relief is in sight," she said.

See also: Trump says Thanksgiving food prices will be cheaper this year. Here's what the numbers say.

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-Andrew Keshner

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November 19, 2025 13:50 ET (18:50 GMT)

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