[Insight & Opinion] Trump 2.0: Are We Living in a Manipulated World?

In the late 1990s, during a period of rapid economic growth, South Korea’s inflation target was around 4%. Although the world has changed since then, the government’s approach to price control in the past is still open to criticism. Of course, bureaucratic gestures to suppress inflation were subtle, but always noticeable. During the era when weekly inflation report cards were issued, civil servants in charge suffered from the burden of managing prices for individual items.

Price hikes have always been a source of political strife. In 1995, an oil spill off the southern coast reduced the anchovy catch by 89% and drove prices up by 78%. At the time, rumors spread that President Kim Youngsam had raised anchovy prices to increase his father’s income. The opposition party used this as a pretext to launch a political advertisement titled “Anchovies Are Outrageous,” criticizing the government’s inflation measures. When cabbage prices soared and cabbages became “golden cabbages,” what were the lawmakers thinking as they brought cabbages to the National Assembly audit?

Such incidents are now happening during President Donald Trump’s term. In May, President Trump posted on the social media platform Truth Social, attempting to pressure Walmart to hold down price increases. His main purpose was to stop Walmart from using tariffs as an excuse to raise prices across the board. Trump’s demand that Walmart absorb the tariff costs rather than passing them on to consumers does not align with economic logic.

Walmart is not alone. Consider Amazon, the largest online retailer in the United States. When Amazon tried to indicate the additional tariff costs on some products, President Trump called Amazon’s founder and his rival, Jeff Bezos, to express his displeasure and attempted to pressure Amazon to lower prices.

President Trump was infuriated by statistics released this month showing a rapid deterioration in the U.S. employment situation. He claimed these were “manipulated numbers” and abruptly fired the head of the Bureau of Labor Statistics, who was a woman appointed by the Biden administration. Economists noted that the unusually large downward revision indicated the labor market was cooling faster than expected. Warnings that the Trump administration’s tariff policies would lead to reduced investment and slower job growth have now become reality.

What does President Trump think? He stated that fair statistics are the foundation of democracy, that the dismissal was justified, and that the position would be filled by someone far more competent and honest. On the 11th, he nominated E J Antoni, chief economist at the conservative think tank Heritage Foundation and a loyal supporter, as the new director. Regardless of who is right, it is astonishing that such events are unfolding in the world’s leading nation.

The U.S. Bureau of Labor Statistics announced on the 12th (local time) that the U.S. Consumer Price Index (CPI) for July rose 2.7% year-on-year. This matched the June figure (2.7%), and the market interpreted it as a green light for the interest rate cuts President Trump so desires. Excluding food and energy, the core CPI rose 3.1% during this period, exceeding market expectations of 3%.

On the 14th, the Bureau of Labor Statistics reported that the Producer Price Index (PPI) for July rose 0.9% from the previous month, marking the largest monthly increase in three years and a 3.3% rise year-on-year. If the Trump administration’s high tariffs on all imports continue to drive up costs and soon cause a sharp spike in the CPI, it would be a serious problem. There is a time lag before CPI increases, and Federal Reserve Chair Jerome Powell’s stance on the September rate decision?whom President Trump considers an obstacle?has attracted more attention than ever.

If importers, who had not passed on the burden of tariff hikes to consumers until July, begin reflecting these costs in consumer prices starting in August, what stance will President Trump take? Will he claim the data is manipulated? In English, the government’s strong requests to industries and labor unions to restrain wage and price increases is called “jawboning.” I am very curious whether this word will become the word of the year.

Wonkyung Cho, Professor at UNIST and Director of the Global Industry-Academia Cooperation Center