The reason Donald Trump is making a meal over the price of the humble egg

He doesn’t seem to care that Justin Trudeau, the departing Canadian leader, is spitting feathers. Nor is he bothered by Mexican president Claudia Sheinbaum plotting revenge.

But Donald Trump is obsessed with the price of eggs. And it is the cost of groceries and other essentials that could stop him in his tracks, rather than the outrage of Canadians and Mexicans in response to the tariffs he is slapping on them.

The rise in the cost of eggs has become a symbol for the squeeze on ordinary American families. Trump pins the blame on his predecessor Joe Biden.

He claims his own policies, including the tariffs, will make the breakfast staple affordable again.

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Now, however, his promises that he will tackle inflation and boost the economy are being scrambled.

Warnings of a so-called ‘Trumpcession’ by economists – most of whom attribute the rise in egg prices to bird flu not Biden – have grown louder in recent days.

Worryingly for Trump, the data is increasingly downbeat.

Credit rating agency S&P predicts the country’s gross domestic product (GDP) could be 0.6 of a percentage point lower over the next 12 months than previously forecast as consumers are squeezed by higher prices, and uncertainty creates reluctance among investors.

Top Wall Street investment banks believe the probability of an economic downturn has gone up significantly.

JP Morgan puts the chances at 31 per cent from just 17 per cent in November.

Goldman Sachs says there is nearly a one in four chance of a US recession, up from 14 per cent two months ago.

This follows a stark warning from the Atlanta Federal Reserve, which predicted the US economy would shrink by 1.5 per cent in the first three months of the year, a dramatic reversal of its previous prediction of 2.3 per cent growth over the same period.

How much do eggs cost in the US? 

Trump’s approach to the US economy is bitterly divisive. What no one contests, however, is that eggs really are ridiculously dear.

In January, the average price of a dozen large eggs hit nearly $5 (£3.90), according to the US Bureau of Labor Statistics, almost doubling in a year.

Other staples are going up too, and the pain is set to continue when new US inflation data is released on Wednesday, with some analysts predicting the tariffs could add as much as 0.7 percentage points to US inflation, which at its last reading stood at 3 per cent for January.

S&P predicts it will ‘stay close’ to 3 per cent over 2025. The Federal Reserve’s target is 2 per cent.

That in turn means central banks may keep interest rates higher for longer, which can act as a curb on spending and economic growth.

Tariffs – which are a tax paid by US importers on certain goods coming in from overseas – are likely to drive inflation up further, experts fear, as firms seek to pass on costs to customers. 

‘The tariffs are expected to have a direct impact in boosting US inflation and limiting the Fed’s ability to cut the interest rates to boost growth,’ said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.

The US economy had already shown signs of weakening before Trump began his trade war in earnest last week.

The speed at which decisions are made by the White House, coupled with rapid changes of tack, are creating uncertainty and undermining confidence among businesses and consumers.

On Monday, the President confirmed that 25 per cent tariffs would be slapped on imports from Canada and Mexico, two of the US’s biggest trading partners.

Only days later Trump announced that levies on some goods would be suspended for a month, fuelling further uncertainty among businesses.

Most reputable economists disagree with Trump’s opinion that tariff is a beautiful word.

The general view is that there are no winners in a tariff trade war of the kind sparked by Trump, because it leads to a beggar-thy-neighbour spiral of retaliation.

Tariffs could add $2,000 a year to Americans’ costs

In this scenario, businesses and citizens in all of the countries involved ultimately bear the pain.

This will include Americans. Analysis from Yale University’s Budget Lab predicts the tariffs could add as much as $2,000 a year to an average family’s living costs.

Trump insists the tariffs will give the US leverage in trade negotiations. Others argue they will harm America itself and damage other economies, including the UK, even though Trump has not directly threatened to slap further tariffs on our exports.

Bank of England Governor Andrew Bailey told MPs last week there was a ‘substantial risk’ to the British economy from the ‘major shift’ in US trade policy, adding that the central bank was taking the issue ‘very seriously’.

To add to the cocktail of risk, US businesses are vulnerable to boycotts from consumers who are opposed to Trump.

Canadian firms have already begun pulling US goods from their shelves and the province of Ontario cancelled a $100 million contract with Starlink – the satellite business of Trump’s ally Elon Musk.

Electric car firm Tesla, also controlled by Elon Musk, has been hit by collapsing sales in Europe and China due to growing outrage over the tycoon’s links to the US government.

Trump might argue that a shake-up of the economic world order is needed for the US economy to reach its full potential, and that there is bound to be some short-term pain involved. In other words, you can’t make an omelette without breaking eggs.

But for a President who has hung so much credibility on his economic prowess, this is far from an ideal scenario.