It’s not every day that McDonald’s announces it is cutting prices. But on Thursday, the fast-food giant said it will reduce the price of its combo meals. “The move is part of the chain’s push to restore its reputation for affordability, which has taken a hit with cash-strapped consumers,” The Wall Street Journal reported. “Restaurants, particularly fast-food chains, are struggling to attract customers worn down by inflation and unsure about the U.S. economy.”
But while McDonald’s tries to make amends to those “worn down” consumers, other big corporations are still increasing prices — thanks to President Donald Trump’s tariffs.
For example, on Wednesday, Sony announced that it is raising the price of its Playstation 5 video game console by $50 even though historically, video games consoles only get cheaper more than four years after their release. In case the company’s rationale of a “challenging economic environment” wasn’t a clear enough link to the tariffs, the increase only applies to U.S. consumers. Sony’s video game rivals have already raised prices, with Microsoft bumping its Xbox Series X by $100 and Nintendo increasing prices for its Switch and increasing prices for the accessories for the new Switch 2.
Home Depot announced Tuesday that it will begin raising prices due to tariffs, after previously holding out against such increases. Late last month, Procter and Gamble (which makes dozens of household brands) said it would raise prices for 25% of its U.S. product lineup. And Thursday morning, Walmart said it had begun raising prices, with Walmart Chief Financial Officer John David Rainey telling CNBC that “tariff-impacted costs are continuing to drift upwards.”
While these big names get the headlines, of course, small businesses — which have less flexibility to handle the tariffs — are raising their prices as well. With consumers “more sensitive and suspicious of corporate greed, especially after years of inflation,” Marketplace reports, “companies are looking for targeted ways to raise prices that can sometimes seem sneaky” — such as cutting free shipping or adding service fees. As Federal Reserve Board Chair Jerome Powell noted, “some companies will certainly be taking advantage” of the tariffs to raise prices even when they’re not affected — just as many companies pushed prices higher during the pandemic, whether or not they were affected by supply chain issues.
On top of all these price hikes, electricity costs are rising at twice the rate of inflation, and housing remains unaffordable for millions. As we expected, Trump’s promises to bring down prices, which he repeated so often during the election last year, have proven to be empty.
But voters haven’t forgotten those promises. No wonder then that, amid Trump’s broader slide in the polls, his standing on specific issues has declined most precipitously on inflation. Meanwhile, from Virginia gubernatorial candidate Abigail Spanberger to New York City mayoral candidate Zohran Mamdani, Democrats have found success running on lowering the cost of living.
But simply reversing the tariffs wouldn’t solve Americans’ struggles with inflation. “The ‘K-shaped’ economy is back, where there’s a clear divergence between how the top and the bottom are faring,” Washington Post contributing columnist Heather Long wrote this month. “Any company that can is trying to go ‘upmarket’ as much as possible in this environment.” The top 10% of households by income (those making $250,000 or more a year) now account for roughly half of all consumer spending, according to Moody’s Analytics, up from 36% three decades ago. With so much money at the top, raising prices and targeting the wealthy few is a far more viable strategy for many businesses than lowering prices and broadening the customer base.
Americans’ swiftly souring views of Trump’s handling of inflation are a reminder that, should they retake power, Democrats will not have much of a grace period to ease voters’ pocketbook struggles. The party needs to settle on a plan that can be implemented swiftly and at scale after Trump’s renewed failure. The electorate is angry, the scale of the problem is massive, and the relief needed is urgent. But the rewards for the party that finally delivers that relief should be enormous.
This article was originally published on MSNBC.com
