The challenge: The Trump administration is positioning its sweeping deregulatory agenda as a pro-business reset that will stimulate the economy. But several experts and government analyses suggest that many of the regulatory rollbacks will likely impose significant new costs on US households, per The New York Times.

Two examples highlight the situation:

• The Energy Department’s proposal to reverse 16 appliance efficiency standards—covering dishwashers, microwaves, and refrigerators—could erase an estimated $576 in annual savings per household, per a Berkeley Lab analysis. These standards also provide manufacturers a single national benchmark; reversing them could create a patchwork of state rules, increasing compliance costs that will likely be passed on to consumers.
• The Consumer Financial Protection Bureau’s move to scrap an $8 cap on most credit card late fees means consumers will pay roughly $10 billion more annually in bank penalties.

Shifting trade policies add additional complexity: Uncertain tariff policies compound the pressure on retail and manufacturing.

• Gap Inc. projects up to $150 million in added costs this year due to tariffs, while Kimberly-Clark expects a $300 million increase in supply chain expenses.
• Companies like Walmart, Nike, and Mattel have already warned that they plan to pass some of those costs on to consumers.

Our take: It’s becoming increasingly clear that consumer spending power is eroding.

• The shift hasn’t gone unnoticed. The University of Michigan’s Current Economic Conditions Index, which reflects consumers' views of their financial situation and the overall economy, in May fell to its lowest reading since November 2022.