US wholesale prices dropped 0.5% last month despite President Trump’s tariffs
Wholesale prices in the U.S. unexpectedly fell in April, contradicting economists’ predictions and easing inflation fears. The decline comes as President Trump moves to ease trade tensions with China by rolling back tariffs on both sides.
Key Facts:
- U.S. wholesale prices dropped 0.5% in April—the first decline in over a year, according to the Labor Department.
- Core wholesale prices (excluding food and energy) fell 0.4% from March and rose 3.1% year-over-year.
- The decline was led by a 0.7% drop in service prices.
- Consumer prices also saw their smallest annual increase in more than four years—up just 2.3% from April 2024.
- Trump scaled back tariffs on Chinese imports from 145% to 30%, while China reduced its retaliatory tariffs on U.S. goods from 125% to 10%.
The Rest of The Story:
The latest government data shows that wholesale prices unexpectedly fell in April, defying expectations of a rise.
Economists had projected a modest increase, but instead, the Producer Price Index (PPI) declined by 0.5%.
This marked the first monthly drop in over a year.
The decrease was largely driven by a 0.7% decline in the cost of services, which pulled down the overall index.
Meanwhile, the core PPI—excluding food and energy—also fell 0.4%.
These numbers come on the heels of similarly modest consumer inflation, with April’s consumer price index up only 2.3% year-over-year, the slowest gain since 2020.
These developments occurred amid a major policy shift.
Just days earlier, President Trump announced a de-escalation in his trade war with China, significantly reducing tariffs on Chinese imports.
In return, China lowered its steep tariffs on American goods.
JUST IN: In April, wholesale prices saw the biggest monthly decline in more than five years.
"You saw a much bigger cooling of inflation at the producer price level month-to-month." pic.twitter.com/IDdZhxcd7M
— Rapid Response 47 (@RapidResponse47) May 15, 2025
Commentary:
This outcome flies in the face of what the so-called economic “experts” and the left-wing media had predicted.
For months, we were told Trump’s tariffs would drive up inflation and bring economic pain to everyday Americans.
The opposite seems to be happening.
When Trump first imposed sweeping tariffs, critics claimed the costs would be passed on to consumers.
But instead of prices surging, wholesale and consumer prices are cooling off.
That’s not what the economic elites told us would happen.
This shift also comes at a moment when Trump is renegotiating trade policies to bring long-term benefits to American workers and businesses.
Cutting tariffs on both sides could pave the way for more balanced trade with China—something previous administrations never achieved.
It’s another reminder that common sense and a results-first approach work better than academic theories and fearmongering.
For years, Washington insiders and media pundits have dismissed Trump’s trade agenda.
Now they’re being proven wrong—again.
The declining inflation figures combined with de-escalating trade tensions could be early signs of a broader economic resurgence.
Lower wholesale costs mean businesses can keep prices in check while maintaining margins, which supports job growth and wage stability.
The truth is, America needed a reset on global trade.
Trump’s aggressive stance finally brought countries like China to the table.
The fact that inflation hasn’t surged as predicted shows those tough decisions are paying off.
The Bottom Line:
Wholesale prices in the U.S. unexpectedly fell in April, contradicting widespread predictions that Trump’s tariffs would cause inflation to rise.
With both consumer and wholesale price increases slowing, the data suggests the economy is more resilient than critics expected.
As trade negotiations improve, the long-term outlook for American growth is becoming more optimistic.
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