Donald Trump is piling pressure on US companies to cut prices as the war-driven surge in costs pushes inflation to a three-year high and threatens Republicans’ chances in November’s midterm elections.
In recent weeks the US president has warned of “big problems” for fuel retailers if they fail to slash prices, and he has taken credit for pressuring Walmart into marking down the costs of thousands of goods.
His latest interventions in corporate America are a worrying turn towards state meddling in free markets, analysts said. They follow Trump’s previous efforts to press companies into investments, secure equity stakes and extract payments in return for regulatory approval.
“This is a crazy turn for a conservative government,” said Paasha Mahdavi, a political scientist at UC Santa Barbara. “What I have seen Trump doing is something that I and others have called Trumpismo.”
“It’s quite ironic that a president who has been touting free markets is actually taking on the socialist, hyper-populist playbook — and it’s really alarming,” he added.
On Monday, Trump posted on Truth Social that Walmart, the country’s leading retailer, had slashed prices “at my administration’s request” and called on its competitors to “follow the lead of these absolute patriots”.
Walmart made no mention of the president as it launched a summer sale this week following a meeting between US retailers and agriculture department officials. The company did not respond to a request for comment.
Trump also recently called on petrol stations to “get their Prices down, IMMEDIATELY”, telling them to “start targeting around the $2.50 a gallon number” as his administration launched a probe into price gouging. “If Retailers don’t do this, big problems lie ahead,” he warned.
Michael Strain, director of economic policy studies at the right-leaning American Enterprise Institute, said the price interventions had a “flailing-about quality” and were on “a different level” from previous administrations.
“I think it’s an indication of how much trouble the president is in because everything is so expensive,” he added.
The pivot is a stark contrast from Trump’s remarks at Davos in 2020 when he touted US capitalism as “an example to the world of a working system of free enterprise that will produce the most benefits for the most people”.
The president’s efforts to curb high prices come as a surge in fuel costs driven by his war against Iran has pushed inflation to a three-year high, with annual price growth hitting 4.2 per cent in May.
Voters have grown frustrated, with a recent FT poll finding 58 per cent of respondents believed the war had not been worth the cost. That has left the administration in a bind as it scrambles to placate voters ahead of November’s midterm elections.
A White House official said the administration’s actions were aimed at increasing the supply of goods to bring down consumer costs and denied that it had strayed from free-market principles.
“There is a narrative about the administration being heavy-handed and violating the free market, but everything is based on a fundamental understanding of Econ 101: that when you increase supply, prices go down.”
“The actual substance beyond the rhetoric is unambiguously free market,” the official added. “There’s no gun being held to anyone’s head.”
Trump’s return to the White House was fuelled by voters’ ire over high prices under his predecessor Joe Biden. Trump vowed on the campaign trail to “end inflation” and “make America affordable again”.
But now he faces the same issue. Democrats have seized on what they have dubbed “Trumpflation” and blamed the president’s policies — including the war in Iran and his tariff regime — for the recent burst of higher prices.
Petrol prices have jumped to $3.88 a gallon, up about 30 per cent since the war broke out in February, though they have receded from the highs hit in May. Diesel has risen by a third. Brown University estimates the war has cost the average US household more than $500 in fuel costs.
That has bled through to other areas of the economy as transportation costs escalate. Fruit and vegetables are 6 per cent more expensive than they were a year ago.
Ron Bonjean, a Republican strategist, said the administration needed to present a “concentrated effort politically to show voters that the White House is working to get inflation under control”.
“It does help for the administration to show that it’s trying,” he said. “[But] . . . it’s very difficult to overcome unless things actually change.”
Some of the administration’s efforts have paid off. A push to contain avian flu and investigate price rises caused egg prices to tumble from record highs reached in March 2025. The White House has also negotiated agreements with drug companies to slash medicine prices as part of the president’s Trump Rx insurance programme.
But last week’s FT Focaldata poll found 67 per cent of voters disapproved of how Trump was handling the cost of living. Just 36 per cent said they approved of the job the president was doing overall, down two points versus the previous month.
Free market economists worry the recent interventions could lead to lasting market damage as companies try to placate him.
“There’s a general corruption of market economics that we are seeing from this administration in using the bully pulpit to browbeat companies over prices and investment decisions,” said Ryan Bourne at the Cato Institute, a libertarian think-tank.
“It probably leads companies to react and cut prices in a way that is not in the interest of their shareholders or customers, which is something that will have negative effects long after the administration is gone.”
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