Trump’s Canada tariffs threaten to make life less affordable before midterms
Trump’s escalating trade war with Canada could raise costs for businesses and consumers in key battleground states before voters head to the polls.
Voters handed Democrats control of Congress in the midterms after the GOP’s affordability pitch fell flat. Now Democrats must prove they can bring costs down after campaigning on a promise to address Americans' economic woes.
Scott Lincicome, vice president of general economics at the Cato Institute, said the gap between Trump’s promise to lower prices and voters’ experience since he was re-elected is likely what led to widespread Republican losses Tuesday night.
"When you campaign on lowering prices, and then you actually actively increase prices, it's probably gonna hurt when voters go back to the polls and are mad about prices still being too high," Lincicome told Fox News Digital.
Three charts show the cost pressures that helped shape the midterm vote — and the affordability challenge Democrats now inherit when they take control in January.
HIGH PRICES PUT TRUMP’S ECONOMY IN THE SPOTLIGHT AS THE GOP FIGHTS TO HOLD CONGRESS
Customers shop for groceries at a Target store in Salt Lake City, Utah, on Friday, July 31, 2026. (Kim Raff/Bloomberg/Getty Images)
Everyday costs keep climbing
Consumer prices rose 3.7% over the year through September and 0.6% from August, according to the latest inflation report. The consumer price index tracks prices across a broad range of household expenses, including food, housing, medical care and transportation.
Trade policy added to some of those costs. A New York Federal Reserve study found that Trump’s tariffs added about 2.9 percentage points to prices across the consumer goods researchers examined.
Roughly one-third of the increase came from U.S.-made products, as domestic manufacturers faced higher costs for imported materials and components.
The figures show the price pressures voters faced, but not how they assigned responsibility for them.
Democrats' midterm victories set up a new fight over Trump’s economic agenda, including his sweeping tariffs. A Democratic-led Congress can hold hearings, demand information and force votes, but experts say it may have limited ability to unwind the policies on its own.
"Because tariffs are set by the president using authorities that Congress has already delegated to him, changes in the control of Congress are unlikely on their own to change the administration’s tariff policy," Pierre Yared, a senior fellow at the Council on Foreign Relations and former acting chairman of Trump’s Council of Economic Advisers, wrote Wednesday.
AMERICAN-MADE GOODS ALSO GOT MORE EXPENSIVE UNDER TRUMP TARIFFS, NEW RESEARCH FINDS
Yared said Congress would need two-thirds majorities in both chambers to override a presidential veto of legislation repealing or limiting the tariff authorities Trump has used.
Democrats won control of both chambers but fell short of that two-thirds threshold.
Diesel costs ripple through the economy
A semi-truck driver replaces a diesel fuel pump at a Love's gas station in Eloy, Arizona, on Wednesday, March 18, 2026. (Rebecca Noble/Bloomberg via Getty Images)
Wars in Iran and Ukraine have disrupted global fuel supplies, putting pressure on households and businesses.
Diesel prices climbed from about $3.45 per gallon in early 2025 to a peak of $6.53 in October 2026, according to the U.S. Energy Information Administration.
The increase reaches beyond the pump because trucks, freight trains and farm equipment all rely on diesel, and businesses may pass some added transportation costs on to customers.
Lincicome said consumers are facing pressure from both trade and energy costs.
"It's really a double whammy for American consumers because first you had the tariffs which increased the prices of a lot of products. And then you had energy prices spike because of the Iran war," he said.
Gasoline prices are also adding to household costs. They jumped 9.1% in September, accounting for more than half of that month’s overall increase in the Consumer Price Index.
A tougher path to homeownership
Housing industry leaders say states that have prioritized homebuilding have been better positioned to accommodate population growth and economic expansion. (Joshua Lott/Bloomberg/Getty Images)
Housing remains a major affordability challenge, especially for prospective buyers. Freddie Mac’s 30-year mortgage rate averaged 7.24% as of Oct. 29, while the median price of an existing home reached $417,500 in September, according to the National Association of Realtors.
Together, higher borrowing costs and home prices make it harder for many households to enter the market.
But those costs are rising even before a home is listed.
TRUMP’S HOUSING CHIEF PAINTS A GRIM PICTURE FOR HOMEOWNERSHIP IN ONE MAJOR AMERICAN CITY
Jim Tobin, president and CEO of the National Association of Home Builders, told Fox News Digital that higher diesel prices had put "a little bit of pressure on home building in the short term."
Diesel powers the trucks hauling materials and the heavy equipment used on construction sites, adding to the cost of building lower-priced homes.
Rising home values can benefit people who already own property, but that wealth is difficult to access without selling or borrowing against a home. For renters and first-time buyers, the costs are more immediate.
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Democrats’ midterm victories put those affordability concerns at the center of the next Congress. The charts show the costs voters faced; the new majority will now face pressure to show it can bring them down.
