Economists say President Trump's trade policy, tax cuts and infrastructure-spending plan could reignite inflation, making goods more expensive at a time when much of his base already feels squeezed.

Jon Lansner, business columnist for the Orange County (Calif.) Register, points out how good we've had it: The Consumer Price Index rose 1.3% last year, the fifth straight year under 3%, and best in half a century.

  • Why the change? Trump policies — including a tax on imports, tax incentives for companies to return cash from overseas, and up to $1 trillion in infrastructure spending — could fuel inflation.
  • And one more: The N.Y. Times' Neil Irwin, in an Upshot dispatch in November, pointed out that increased deportations could lead to a shortage of low-skilled labor: "The remaining workers … could demand higher pay."
  • Why it matters: Inflation is felt most acutely by people who immediately spend most of their incomes, many of them in the economically stressed Trump coalition. And how people feel will be a vital component of Trump's narrative headed into the 2018 midterms and his 2020 reelection.
Subscribe to Axios AM/PM for a daily rundown of what's new and why it matters, directly from Mike Allen.
Please enter a valid email.
Please enter a valid email.
Server error. Please try a different email.
Subscribed! Look for Axios AM and PM in your inbox tomorrow or read the latest Axios AM now.

Go deeper

Updated 33 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Politics: Americans feel Trump's sickness makes him harder to trustFlorida breaks record for in-person early voting.
  2. Health: The next wave is gaining steam.
  3. Education: Schools haven't become hotspots.
  4. World: Ireland moving back into lockdown — Argentina becomes 5th country to report 1 million infections.

Meadows confirms Trump's tweets "declassifying" Russia documents were false

Photo: Tom Williams-Pool/Getty Images

White House Chief of Staff Mark Meadows confirmed in court on Tuesday that President Trump's tweets authorizing the disclosure of documents related to the Russia investigation and Hillary Clinton's emails "were not self-executing declassification orders," after a federal judge demanded that Trump be asked about his intentions.

Why it matters: BuzzFeed News reporter Jason Leopold cited the tweets in an emergency motion seeking to gain access to special counsel Robert Mueller's unredacted report as part of a Freedom of Information Act request. This is the first time Trump himself has indicated, according to Meadows, that his tweets are not official directives.

2 hours ago - World

China embraces hostage diplomacy

Illustration: Sarah Grillo/Axios

The Chinese government is threatening to detain foreign citizens unless their home governments do what Beijing demands. In some cases, China has already made good on those threats.

The big picture: This marks a potential evolution of China's "wolf warrior diplomacy" to outright rogue state behavior, putting it in the company of countries like North Korea and Iran, which have also engaged in hostage diplomacy.