The man who once defined ‘making deals’ as extracting maximum profit from chaos has now declared a strange affection for inflation. Donald Trump, in a rambling press conference, stated flatly: ‘I love inflation.’ This is the same inflation that has sent shockwaves across the Atlantic.
The UK Treasury, ever the nervous observer of American economic antics, has issued a dire warning: British exports will suffer. The logic is simple. American inflation pushes up the dollar, making British goods cheaper for American buyers in the short term.
But this is a trap. A strong dollar and rising US prices will soon lead to higher import costs for the UK, squeezing British consumers and manufacturers alike. The Treasury’s memo, leaked to The Guardian, speaks of ‘ripple effects’ and ‘potential contraction’.
One must ask: is Trump merely being provocative, or is he truly unaware of the economic history he is repeating? The 1970s, a decade of stagflation that broke the post-war consensus, were fuelled by precisely this kind of careless rhetoric and policy. Nixon’s wage and price controls were a desperate scramble after years of inflationary neglect.
Trump’s ‘love’ is an embrace of the very volatility that destroyed middle-class savings. The British economy, already teetering after Brexit and COVID, does not need an American inflation spike. The Treasury’s warning is muted, as is the British way, but the message is clear: we are passengers in a car driven by a man who loves to swerve.
One can almost hear the Victorian economists turning in their graves. Ricardo and Smith, who preached the gospel of stable money and free trade, would weep. But this is the age of performative economics, where a former reality TV star turns macroeconomic forces into a catchphrase.
The tragedy is that the British worker, the exporter, the manufacturer, will pay the price for Trump’s romance with rising prices. The only inflation that matters in the end is the inflation of political folly. And that, sadly, is boundless.
