President Donald Trump reacts during a rally in Greensboro, North Carolina, U.S. October 22, 2024. REUTERS/Carlos Barria
As Trump’s tariffs and his war with Iran drive up prices of everything from oil to steel, you’d think big American corporations would be screaming bloody hell. Presumably, Trump’s tariffs and war are squeezing their profits just as they’re squeezing the wallets of average Americans.
To the contrary, corporate America is quietly encouraging both Trump’s war and Trump’s tariffs. Why?
One possibility is they’re raking in money off the war as defense contractors and suppliers.
Some surely are, but this can’t account for the acquiescence if not outright support by most big American corporations that have nothing to do with the defense-industrial complex.
Another possibility is they don’t want to p--- off Trump, fearing his retaliation.
But if they were really concerned about the negative effects of Trump’s war and his tariffs on their bottom lines, surely they’d be using their armies of lobbyists and piles of campaign contributions to stop his war and his tariffs. After all, that’s what the armies and piles are for.
There’s a much simpler explanation for corporate America’s silence if not encouragement. In point of fact, both Trump’s war and Trump’s tariffs are helping their bottom lines.
Trump’s war and his tariffs are allowing domestic U.S. producers to raise their prices to match the elevated prices of imports. And those who aren’t directly affected are using the higher import costs as excuses to raise their prices, too.
Presto! — corporate profits have exploded, and their stock prices have soared.
But American consumers are getting shafted. Both Trump’s war and his tariffs are pushing up prices for a vast range of goods and services. The result is a massive redistribution of income and wealth from American consumers to big American corporations.
This is the story of the American political economy under Trump that’s rarely if ever told, but it’s critical to understanding why Trump has been getting away with his war in Iran and his tariffs without much political opposition.
Start with oil.
Brent crude is now selling for $90.05 a barrel. If the war drags on it could push crude prices much higher, especially if it further depletes oil inventories, and spreads to Houthi militants starting a naval blockade in the Red Sea and to other Gulf states.
Oil prices are set globally. As global supplies dwindle, oil prices rise across the board — including prices charged by domestic U.S. producers. They’re enjoying a huge windfall.
With crude oil prices averaging $95 a barrel between March and June — up from about $66 before the war — ExxonMobil, Chevron, ConocoPhillips, and Occidental Petroleum have collectively raked in some $31 billion in earnings for the second quarter of this year, according to FactSet estimates.
That’s up from about $12 billion for the same period last year.
These windfall profits have helped boost Big Oil’s stock prices. Big Oil’s investors and executives (who are paid partly in shares of stock) have done wonderfully well.
But American consumers are bearing the burden, as gas prices once again soar past $4 a gallon, a dollar more than they were before Trump started his war on February 28.
So is it any wonder that Big Oil isn’t criticizing Trump’s war, and is quietly rooting it on?
Or consider steel. Trump imposed steel tariffs of 50 percent in March and June 2025. These tariffs have driven up steel prices in the United States.
The tariffs have been a boon to American steelmakers, who have raised the prices they charge their American customers to match the higher prices now charged for steel from abroad.
As a result, leading American steel producers like Nucor and Steel Dynamics report significant year-over-year earnings increases.
Nucor’s profits in the second quarter of 2026 were $1.16 billion, up from $603 million a year earlier. Steel Dynamics has reported a second-quarter income of $534.1 million, nearly double its net income compared to the same period last year. A third U.S. producer, Cleveland-Cliffs, earned $97 million in the second quarter of this year (before interest, taxes, depreciation, and amortization), compared to a loss of $213 million last year, and the firm anticipates doubling earnings next quarter.
Who’s bearing these higher costs? American consumers of steel — in the prices of everything we buy that contains steel (such as cars and appliances).
The Producer Price Index (a widely used proxy for input costs) for steel mill products is now sitting at its highest point since May 2023.
American-based producers that utilize oil and steel have been able to pass those costs on to their customers without harming their profit margins. Some corporations that don’t depend on oil or steel have used the higher import costs as excuses to raise their prices, too.
Hence, Trump’s war and Trump’s tariffs are wins for corporate America. Profit margins are up, the value of shares on the stock market are up. Shareholders are happy.
Big corporations aren’t raising a fuss about the war or tariffs because they like what’s happening.
But American consumers are getting shafted. Their wages aren’t keeping up with the price increases. Yet they have no alternative but to pay the higher costs for energy and steel and everything else — which is the whole point.
As the inflationary effects of Trump’s war and his tariffs (taxes) on imports spread throughout the economy, they’re hiding what’s really occurring: an upward redistribution from consumers to big American corporations.
American consumers need to know the truth: Two of the major reasons why everything is less affordable are Trump’s war and his tariffs.
Consumers may not have armies of lobbyists and piles of campaign contributions to do their bidding, but they do have a way to express their disapproval. They can vote out Trump Republicans on November 3.
Robert Reich is a professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com/.