Rising costs and Iran war test Trump ahead of midterms

Shafaq News- Washington

The war with Iran, renewed trade tensions, and mounting federal debt have increased pressure on the US economy ahead of the midterm elections, complicating President Donald Trump’s promises to lower living costs and rein in government spending, the New York Times (NYT) reported on Saturday.

The six-month Iran war has kept gasoline prices elevated while US military spending has contributed to a national debt that has surpassed $40 trillion. Rising government borrowing has also unsettled bond markets and helped keep borrowing costs, including mortgage rates, high for US households. Inflation stood at 3.7% year-on-year in July, remaining well above the Federal Reserve’s target.

NYT said Trump’s renewed tariff offensive against Canada could add further pressure on consumers, with the Yale Budget Lab estimating that the latest duties could cost the average US household about $1,100 annually. Economists cited by the report said tariffs, war, and other policy-driven shocks have kept inflation higher than previously expected, despite continued economic growth, stronger manufacturing, a steady labor market, and rising investment in artificial intelligence.

The economic strain could turn the November midterms into a test of Trump’s credibility on the economy, one of the issues that helped return him to office. The newspaper said the administration still argues its policies will strengthen the economy over time, while economists warn that persistent inflation, high debt-servicing costs and uncertainty over trade and the war with Iran continue to weigh on households and businesses.

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