Today, 17 May 2025, US President Donald Trump took to Truth Social and delivered yet another economically illiterate proclamation.

In a characteristically bombastic post, Trump lashed out at Walmart, the world’s largest retailer, for daring to suggest that his newly imposed tariffs would lead to higher consumer prices. Trump thundered that Walmart should simply “EAT THE TARIFFS” rather than pass the cost on to customers, warning ominously, “I’ll be watching, and so will your customers!!!”

For those of us who remember the tragic farce of Zimbabwe’s hyperinflation under Gideon Gono, this is depressingly familiar.

Back in 2007, Gono, as Zimbabwe’s central bank governor, physically threatened shopkeepers in Harare for raising prices in response to the collapsing Zimbabwean dollar.

He demanded they hold prices flat while the printing presses ran wild. The result? Empty shelves, a flourishing black market, and eventually a currency so worthless it had to be abandoned.

Now, Trump is playing a similar hand. Rather than accept the obvious—that tariffs are taxes on American consumers—he has resorted to blaming businesses for following the basic laws of economics.

This is not “America First.” It’s economic populism dressed up as patriotism, and it risks doing to the U.S. economy what Gideon Gono did to Zimbabwe’s.

Basic Economics 101: Tariffs Are Taxes on Consumers

Let’s be clear: tariffs are nothing more than import taxes. When Trump slaps a 30% tariff on Chinese goods or a 25% tariff on Mexican imports (or whatever the rates are this week…), it raises the cost of those goods by exactly that amount unless offset elsewhere.

And contrary to the magical thinking on display in the White House, businesses with razor-thin margins—like Walmart—cannot simply “absorb” those costs without severe consequences for profitability and investment.

Walmart’s net profit margin hovers around 3%.

A 10% tariff already eats through that margin, and Trump’s proposed tariffs are significantly higher. This isn’t rocket science; it’s Econ 101.

Yet, Trump continues to pedal the fiction that tariffs are somehow “paid by foreigners.” Empirical studies from the Peterson Institute and the Federal Reserve have shown that nearly 100% of the cost of previous tariffs during Trump’s first term was passed directly on to American consumers.

As Walmart’s CEO Doug McMillon bluntly told investors, “There’s only so much we can do before these tariffs hit the consumer directly.”

And hit they will. Expect significant price increases across essential categories—from groceries to household appliances—as these tariffs take full effect.

Déjà Vu: Populists Blaming Business for Inflation

Does this all sound familiar?

It should. Back in 2021–22, the left-wing populists, led by then-Vice President Kamala Harris, blamed rising prices on so-called “greedflation.”

Harris accused businesses of price-gouging and demanded regulatory crackdowns. Yet, as I wrote at the time, this was pure economic nonsense.

Greed doesn’t suddenly appear or disappear—it’s a constant. What changed was the policy environment: massive fiscal stimulus and extremely easy monetary policy created a tidal wave of demand chasing limited supply.

I correctly forecasted that the U.S. was heading for double-digit inflation before the end of 2021—an out-of-consensus view at the time but one that proved painfully accurate (See link to my post from April 2021 below.)

That inflationary surge wasn’t caused by greedy CEOs; it was driven by the largest fiscal expansion since WWII and a Federal Reserve asleep at the wheel, maintaining ultra-loose policy while the money supply exploded.

The result? Inflation peaking near 10% in mid-2022.

Now, we’re witnessing the same intellectual laziness from the populist right. Trump and his tariff czar, JD Vance, have resurrected the greedflation narrative, merely swapping out Kamala Harris for Walmart’s boardroom. This is the same fallacy, just in a different political costume.

The Real Culprit: Trump’s Self-Inflicted Supply Shock

Unlike 2021–22, the inflation pressure we’re seeing today in 2025 isn’t driven by excessive demand. This time, it’s a classic negative supply shock created by Trump’s own policies.

His sweeping tariffs are raising input costs across the board, from raw materials to finished consumer goods. And with global supply chains already fragile, this couldn’t come at a worse time.

Former Treasury Secretary Larry Summers recently warned that Trump is repeating exactly the same mistakes he accused Biden of making: engaging in policies that fuel inflation while denying responsibility for the inevitable consequences. As Summers put it, “Trump’s inflationary errors are on track to exceed those of the Biden administration.”

Indeed, we’re already seeing this unfold. The University of Michigan’s consumer sentiment survey shows a sharp uptick in inflation expectations, with over 75% of respondents citing Trump’s tariff policies as a direct cause for concern.

Bond yields are rising as the market begins to price in higher inflation and the likelihood that the Federal Reserve will be forced back into a tightening stance.

Nixon Redux: The Ghost of 1970s Stagflation

If all of this sounds eerily like the 1970s, that’s because it is. Richard Nixon famously imposed tariffs, pressured the Federal Reserve to maintain easy monetary policy, and capped it all off with wage and price controls.

Initially, it seemed to work. Inflation was suppressed temporarily, and Nixon won re-election in a landslide in 1972. But as Milton Friedman warned at the time, this was a temporary illusion. When price controls were lifted, inflation exploded. The result? A decade of stagflation, culminating in the brutal recessions of the early 1980s.

Trump is following Nixon’s failed playbook almost to the letter. He demands easy money from the Federal Reserve, imposes protectionist tariffs, and now bullies private companies to hide the inflationary consequences of his own policies. The parallels are so strong that we might as well call this economic agenda “Trumpflation.”

And the risks don’t end there. Trump is also politicising America’s regulatory institutions. The SEC, now headed by loyalists, is reportedly being used to harass companies that fall out of favour with the administration. This is a dangerous path toward market dysfunction and authoritarian control over the economy.

Conclusion: The Markets Are Not Wrong — Policy Is

When I predicted double-digit inflation in 2021, I based that view on sound monetarist principles. I saw the liquidity overhang, the explosion in broad money supply, and the refusal of the Federal Reserve to act.

Today, I see a different but equally dangerous dynamic: a negative supply shock engineered by reckless tariff policies, coupled with political interference in market processes.

The lesson remains the same. You cannot defy the laws of economics indefinitely. Prices will adjust. Markets will clear. And if policymakers refuse to accept that reality, they will face the wrath of both markets and voters.

Expect more volatility in bond and equity markets. Expect higher inflation prints in the months ahead. And unless there is a dramatic reversal of course, prepare for the possibility that the U.S. economy will once again flirt with stagflation.

Trump’s message to Walmart may have been “I’ll be watching,” but the real message from the markets should be this: We’re watching too. And we’re not buying the nonsense.

And let me add a final, more ominous warning. The real economic and political danger will surface when bond yields start to surge in earnest. Trump will not stop at blaming Walmart and other retailers. The financial sector will inevitably come under attack as interest rates rise and financial markets become more volatile.

Expect banks, asset managers, and financial institutions—those the MAGA movement derisively labels as “globalists”—to be the next scapegoats. Apple, Amazon, and other iconic American technology companies, already frequent targets of populist ire, will find themselves in the crosshairs again, accused of everything from offshoring profits to conspiring against American workers.

And it won’t stop there. If Trump and his economic enforcers truly follow the logic of their interventionist policies, we may soon see demands for not only price controls on groceries and essential goods but also capital controls to prevent financial outflows and currency weakness.

This is a dangerous road—one that risks undermining America’s standing as the world’s premier financial safe haven. Capital controls may start as temporary measures to “protect American jobs” or “stabilise the dollar,” but history teaches us that once such controls are introduced, they are politically difficult to unwind.

In short, the slide from protectionism to outright economic repression is steep and slippery. The populist rhetoric that begins with tariffs and scapegoating Walmart can quickly escalate to attacks on financial freedom and property rights. Investors, business leaders, and policymakers alike should be deeply concerned. History may not repeat, but it certainly rhymes—and the echoes from Zimbabwe and the 1970s are growing louder by the day.

Further Reading and Sources

• Trump’s Truth Social Post on Walmart (17 May 2025) – PBS NewsHour
• Walmart Earnings Call Transcript – CFO John David Rainey on Tariff Impact (May 2025)
• Peterson Institute for International Economics – Who Paid for Trump’s Tariffs? (2020)
• Federal Reserve Bank of Dallas Survey on Tariff Impacts (2025)
• Milton Friedman on Nixon’s Price Controls – Free to Choose Documentary (1980)
• Larry Summers’ Warning on Trump’s Tariff Policies (Politico, 2025)
• University of Michigan Consumer Sentiment Index – May 2025 Report
• The Great Inflation and Its Aftermath – Robert J. Samuelson (Book)
• Cato Institute: Why Price Controls Fail – Historical Analysis (2021)
• Market Monetarist Archive – Leavitt & Gono: When Amazon-Bashers Meet Zimbabwe’s Hyperinflation Houdini (April 2025)
• Market Monetarist – Heading for Double-Digit US Inflation (April 2021)