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President Donald Trump floated a federal gas tax suspension. If enacted, here's how that could impact consumers. View More

watch nowVIDEO6:4506:45This $90-to-$120 oil environment is probably with us for quite some time, says Amos HochsteinSquawk Box Suspending the federal gas tax could bring down prices at the pump. But the move may not provide consumers with meaningful relief, experts say, and it could deplete a key federal fund for highway construction and maintenance.On Monday, President Donald Trump said in Oval Office remarks that he would "reduce" the tax, after saying in an interview with CBS News that he wants to pause it "for a period of time."The taxes and other fees on retail gasoline and diesel fuel are 18.4 cents per gallon for gas and 24.4 cents per gallon for diesel, according to the U.S. Energy Information Administration.Reducing or pausing the federal gas tax would require congressional approval, but several Republican lawmakers immediately advanced proposals to do just that on the heels of Trump's remarks. Read more CNBC personal finance coverageSocial Security 'break-even' claims get social media buzz — experts urge cautionHere's the inflation breakdown for April 2026 — in one chartTrump said $465,000 in retirement savings is 'rich.' Is it?New college grads overestimate starting salaries by nearly $24,000, report findsCNBC's Financial Advisor 100: Best financial advisors, top firms ranked Following Trump's comments, Sen. Josh Hawley, R-Mo., introduced legislation that would suspend the federal gas tax on gasoline and diesel fuel for at least 90 days if enacted."American workers and families deserve immediate relief and this legislation will do just that," Hawley said in a statement.In an X post the same day, Rep. Anna Paulina Luna, R-Fla., also said she plans to introduce a House bill this week to suspend the federal gas tax.In March, shortly after the Feb. 28 start of the Iran war, Sens. Mark Kelly, D-Ariz., and Richard Blumenthal, D-Conn., unveiled legislation to temporarily suspend the federal gas tax through Oct. 1. But that bill hasn't cleared the Senate Finance Committee. Gas prices above $6 per gallon are displayed at Chevron and Shell stations in Monterey Park, California, on April 30, 2026.Frederic J. Brown | Afp | Getty Images The proposals come as Americans prepare for the busy summer travel season. Typically, retail gasoline prices rise in the spring and peak during late summer as demand soars, according to the U.S. Energy Information Administration.But suspending the federal gas tax may only provide modest relief at the pump while creating longer-term fiscal challenges, some policy experts say."This is a problem without an easy, short-run solution," said Adam Hoffer, director of excise tax policy for the Tax Foundation, a nonpartisan think tank.The White House and Hawley's office did not respond to CNBC's requests for comment. What is the federal gas tax? In addition to federal gas taxes, consumers pay state gas taxes that vary from about 9 cents per gallon in Alaska to about 71 cents per gallon in California, according to the Tax Foundation. As of May 12, several states — including Georgia, Indiana, Kentucky and Utah — have taken steps to offer state gas tax relief.Suspending the federal gas tax alone for a period could provide consumers with "very modest relief," said Mark Zandi, chief economist at Moody's."It is 18 cents, and after retailers and distributors take their cut, it could be closer to 10 to 12 cents," he said. "Americans would take it, but it's really on the margin," Zandi said. "I think it would be a welcome relief, but very modest and temporary." Gas prices are up 50% since the Iran war began. The national average for a gallon of gas is $4.50 as of Tuesday, according to AAA. The sudden spike in oil prices and products refined from oil, such as gasoline, have rippled through the economy and strained household budgets, hitting low-income families especially hard, other data shows. Surging gas prices due to the Iran war caused consumer sentiment to sink to a new low in May, according to the University of Michigan's closely watched Survey of Consumers. 'The fiscal costs are real' Federal gas taxes also fund highway construction and maintenance."This is a relatively minor relief, but the fiscal costs are real," said Hoffer with the Tax Foundation.While the federal gas tax brings in billions of dollars in revenue per year, the Highway Trust Fund has increasingly struggled to cover the growing cost of federal infrastructure projects, he said. "That fund is substantially underwater when it comes to being able to finance all of its own projects," Hoffer said.Any consumer benefit may be offset by the risk to these essential services, according to Certified Financial Planner Stephen Kates, a financial analyst at Bankrate.A gas tax suspension "would undoubtedly help consumers in the short term by immediately lowering prices at the pump," Kates said. "However, it would also negatively affect the tax revenue used for road repairs and other services funded by the gas tax." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

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The consumer price index was expected to increase by 3.7% annually in April, according to the Dow Jones consensus. View More

watch nowVIDEO2:2602:26Inflation climbs to 3.8% annually in April, highest since May 2023Markets and Politics Digital Original Video Prices that consumers pay for a wide range of goods and services increased at a faster-than-expected pace in April, as another burst in energy prices raised further concerns about inflation's impact on the U.S. economy.The consumer price index rose at a seasonally adjusted 0.6% for the month, putting the one-year pace at 3.8%, the Bureau of Labor Statistics reported Tuesday. The monthly rate was as forecast, but the annual rate was 0.1 percentage point above the Dow Jones consensus. Excluding food and energy, the core CPI increased 0.4% and 2.8%, respectively, keeping inflation well above the Federal Reserve's 2% goal as the monthly rate was the highest since January 2025. Fed officials consider core a better indicator of longer-term inflation trends.The annual headline inflation rate was the highest since May 2023 and was up half a percentage point from March. Core inflation rose 0.2 percentage point annually. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); Energy prices, which jumped 3.8%, accounted for more than 40% of the headline gain, while food prices also climbed 0.5%. For energy, that put the 12-month gain at 17.9%, while food was up 3.2%. The gasoline index increased 28.4% annually. Food at home prices increased 0.7%, the biggest monthly gain since August 2022.Though energy and in particular gasoline has been much of the headline story, inflation pressures also came from a variety of other areas.Shelter costs rose 0.6% after easing in prior months, indicating that inflation is a problem beyond the Iran war impacts. The tariff-sensitive apparel category increased 0.6% and airline fares accelerated 2.8%, putting the 12-month gain at 20.7%. Tariffs also seemed to hit other areas, with household furnishings and operations up 0.7%. New vehicle prices fell 0.2% while the index for used cars and trucks was flat. Medical care costs decreased 0.1% and hospital services were down 0.3%. Health insurance also declined 0.4%, while motor vehicle insurance increased 0.1%. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); The report also contained bad news for workers, as real average hourly wages slipped 0.5% for the month and fell 0.3% annually.Stock market futures were negative following the report while Treasury yields were higher. Traders also raised the odds for a Fed rate hike by the end of the year to about 30%, according to CME Group data."Inflation is the key drag on the U.S. economy now," said Heather Long, chief economist at Navy Federal Credit Union. "This is hurting Americans. There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains. This is a setback for middle-class and lower-income households and they know it."The latest inflation news comes at a crossroads for the Fed, which has kept its benchmark interest rate steady all year amid misgivings among policymakers both on where the central bank should be heading and how it should communicate its intentions.In late April, the Fed voted again to hold but saw four dissents, the highest since 1992. Fed Governor Stephen Miran again voted no in favor of a quarter percentage point cut, while three regional presidents objected to language that markets read as an indicator that the next move will be a cut. At the same time, incoming Chair Kevin Warsh has advocated for lower rates, a position that will be difficult to square with the burst of inflation since the fighting in Iran began. Energy prices have surged, with oil running above $100 a barrel and gasoline averaging $4.50 a gallon nationally, according to AAA."Given that inflation is heading in the wrong direction and the labor market is holding up, it's very unlikely that the Fed will be able to lower interest rates any time soon and it's possible that we may start pricing in rate hikes for next year," said Chris Zaccarelli, chief investment officer at Northlight Asset Management.Amid the higher rates, consumer sentiment has hit all-time lows though the stock market has been resilient. Major averages are just off their all-time highs as corporate America is nearing the end of a strong earnings season. Consumer spending also has held up, though it's largely been pushed by higher-income earners and the general trend higher in prices. The Atlanta Fed's GDPNow tracker of incoming economic data is pointing toward economic growth of 3.7% in the second quarter, though on a limited set of data for the period. "The good news is that the economy looks resilient to this price shock so far," said James McCann, senior economist for investment strategy at Edward Jones. "Many consumers have benefited from tax refunds this year, hiring has picked up from near stagnant rates in 2025 and businesses are generating robust profit growth. There are limits to these buffers, but we expect, they should provide some reassurance that the economy can weather this shock."Correction: The Federal Reserve voted to stay on hold in April. An earlier version misstated the month. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Here's some of the places where prices are rising fast for consumers. View More

watch nowVIDEO2:2602:26Inflation climbs to 3.8% annually in April, highest since May 2023Markets and Politics Digital Original Video U.S. consumers are blaming the Iran War for the recent inflation surge. But data shows prices are rising in more areas than just energy.The consumer price index climbed 0.6% in April on a seasonally adjusted basis, bringing the 12-month inflation rate to 3.8%, the Bureau of Labor Statistics reported Tuesday. Annual inflation is now advancing at its hottest clip in nearly three years."Consumers are doing their best to absorb higher energy costs, but they're not finding much relief elsewhere," said Bret Kenwell, U.S. investment analyst at eToro. "Inflation pressure isn't just at the pump, it's showing up across the household budget."Tuesday's report comes days after the University of Michigan released a record-low preliminary reading for consumer sentiment. Rising oil prices tied to the Middle East conflict were a key detractor on confidence, according to the release.But Tuesday's CPI data shows consumers are facing sticker shock in other areas. Here are some of the places where prices are rising fast: Housing An apartment for rent in the Center Square neighborhood of Albany. A recent study found that wages are outpacing rent prices across the Capital Region.Timothy Fanning | Albany Times Union | Getty Images Shelter inflation rose 0.6% in April, pushing its year-over-year increase to 3.3%.Within the housing category, lodging away from home jumped 2.4% in April for a 12-month gain of 4.6% Tenant and household insurance ticked up 0.1% in April, placing its annual inflation rate at 7.2%.Economists have been closely monitoring housing inflation since the economic data lapse during the government shutdown last year. They raised alarm that price changes for owners' equivalent rent — a hypothetical measure of what property owners can get for their dwellings and a key factor in overall housing market inflation — were not adequately captured, leading to skewed readings. Food Tomatoes from Mexico are displayed on a grocery store shelf on July 14, 2025 in San Anselmo, California.Justin Sullivan | Getty Images Food at home was 0.7% more expensive in April than March, its largest one-month increase since August 2022. Prices are 2.9% higher year over year.Uncooked ground beef added 2.7% in April, pushing price tags up 14.5% from a year ago, amid soaring cattle prices. Ahead of the summer grilling season, frankfurter prices are 10.7% heftier than the same month in 2025, lifted in part by a 5.8% gain month over month.Tomatoes — a product that's mostly imported to the U.S., making it a subject of President Donald Trump's tariffs — soared 15.1% in April. The product is now 39.7% pricier than a year earlier.Coffee prices, hit by supply concerns, jumped 2% in April, propelling its 12-month gain to 18.5%. Shopping @kreker | Twenty20 Window coverings cost 8.2% more than a year ago, partially driven up by a 0.9% increase from March to April. Dishes and flatware climbed 1.6% in the month for an annual cost increase of 15.4%.The price of jewelry added 3.7% in April, lifting its one-year increase to 16.1%. Watch prices ticked marginally higher in the month, creating a year-over-year jump of 8.8%.Footwear gained 1.4% in March to April, boosting prices to 4.2% above where they sat a year ago. Services FILE PHOTO: Clark resident Jen Valencia still works part time for Instacart, packing her SUV after completing two orders at ShopRite on January 8, 2022 in Clark, New Jersey.Michael Loccisano | Getty Images Inflation also hit some service-driven categories.Rentals and subscriptions of videos and video games cost 16.6% more than a year ago after rising 2.1% between March and April.Delivery services posted a cost increase of 4.3% in April. It's now 13.6% more than expensive on a 12-month basis. Areas of relief In an aerial view, pre-owned vehicles are displayed for sale at a Hyundai dealership lot on April 7, 2026 in Austin, Texas. Brandon Bell | Getty Images News | Getty Images To be sure, consumers found respite in some other areas.While smartphones rose 1% in April, they are still 12.4% less pricey than 12 months ago.Used car and truck prices held steady on the month and are down 2.7% compared with a year earlier.Men's outwear, a category that includes suits and sport coats, fell 2% on the month. Prices are 7.1% lower than in April 2025. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

New York is moving ahead with a pied-à-terre property tax in its budget. Existing taxes from around the world's major cities show the limits of the policy. View More

New York City Mayor Zohran Mamdani speaks about the fiscal year 2027 budget in New York City on May 12, 2026. (Photo by TIMOTHY A. CLARY / AFP via Getty Images)Timothy A. Clary | Afp | Getty Images From New York to Vancouver to London, a once-niche policy idea is moving into the mainstream of urban finance: taxing pied-à-terre properties, second homes, vacation apartments, and luxury units that sit partially or entirely unused.New York City is just the latest example, with Mayor Zohran Mamdani and New York State Governor Kathy Hochul supporting the tax as part of a state and city effort to make up a big budget hole. In a new budget proposal this week, Mamdani dropped plans to raise property taxes on many middle-class homeowners, a move that could have been a difficult one for Mamdani to politically stomach, but kept the pied-à-terre tax idea.The idea has already resulted in a political crisis for the mayor after he posted a video standing outside the building where hedge fund billionaire Ken Griffin owns a unit, leading to well-known politically conservative Griffin's first vocal pushback against Mamdani, and a threat to pull business from New York in the future. While that's a tension that has been expected to percolate between the billionaire class and new socialist democratic mayor, real estate sales in the city remain strong. But there is a more fundamental question about this new form of property tax for New York to now contend with: does it work? There are existing examples from around the world to help in trying to answer it. Versions of second-home and vacancy taxes exist globally, across several major housing markets. In Canada, Vancouver's "empty homes tax" and a federal "underused housing tax" are among the most prominent examples. Toronto recently followed with its own vacancy levy. As housing affordability worsens, rents continue to rise, and fiscal pressures mount, cities are increasingly targeting what are often highly visible symbols of inequality: dark luxury condos in prime urban neighborhoods. watch nowVIDEO5:1305:13Ken Griffin: We will create jobs in Miami as a consequence of NYC Mayor Mamdani's wealth tax videoThe Exchange Vancouver officials framed the city's Empty Homes Tax as an attempt to "return empty or under-utilized properties to use as long-term rental homes for people who live and work in Vancouver," according to the City of Vancouver's public materials on the program. The city has also said net revenue from the tax is reinvested into affordable housing initiatives.In Europe, London and Paris both apply forms of surcharge or higher taxation on second residences and underused properties. Singapore imposes some of the most aggressive foreign buyer surcharges globally, reaching as high as 60% in certain cases.'Vacant homes' taxes and homeowner behaviorParis is now moving toward even steeper vacancy penalties. According to reporting by Le Monde, the city plans to sharply increase taxes on vacant housing, with local officials hoping to push thousands of units back onto the market. Jacques Baudrier, Paris deputy mayor for housing, told the paper: "We hope that at least 20,000 homes will return to the market as a result."At the same time, Paris officials have acknowledged the limits of the policy. A 2025 report from France's Cour des Comptes found that despite broader vacancy taxes and higher rates, the measures "do not appear to have had a significant effect on the overall number of vacant homes."According to Thomas Brosy, senior research associate at the Urban-Brookings Tax Policy Center, these policies generally fall into two categories: recurring property tax surcharges and one-time transaction taxes. The distinction matters, he said, because "it affects how strongly owners adjust behavior over time."The New York proposal is an annual tax on non-resident second homes worth $5 million or more.An important distinction, in contrast to the New York law which targets properties worth $5 million or more, is that many cities impose the charges without specific regard to the price of the property: "In general, these policies tax homes based on occupancy or ownership status, not necessarily on the property's value or the owner's income or wealth," Brosy said. watch nowVIDEO6:5806:58NYC Mayor Mamdani should work with the business community to solve problems, says Bill DaleySquawk Box "Anti–second home policies" are well established around the world, according to Paul Cheshire, professor of economic geography at the London School of Economics. "New York is a follower, not a leader," he said. But Cheshire argued that policymakers often misdiagnose the problem: "The biggest misconception is that these taxes will improve housing affordability in large 'super cities.' The problem is mainly constrained housing supply via policy," he said.Cheshire also noted that in many places, second homes remain a relatively small share of total housing stock, something he viewed as potentially limiting the potential scale of any tax. "Even in communities with high concentrations of second homes, it is still only around 15% of the housing stock," he said, suggesting the taxable base is structurally constrained. Brosy says the empirical evidence from cities like Vancouver and Paris backs up that view. "They raise some revenues and lower vacancy, but they don't lower rents or prices overall — which should be expected, since the luxury housing market is largely disconnected from the broader housing market."One of the most consistent findings among experts is that these taxes generate far less revenue than policymakers initially expect. Global trends may be instructive in predicting the revenue the New York tax may end up generating. New York is expecting as much as $500 million, but that number may prove to be optimistic, according to Brosy. New York City's comptroller has some doubtsMamdani said in an announcement on Tuesday that New York's first-ever pied-à-terre tax "will generate $500 million every year."But New York City's own comptroller recently issued a report saying that while the Vancouver data does show a notable decline in vacant homes in the years since that tax was implemented, its revenue projections for New York have to include the potential for a much lower take than the $500 million estimate put forward. While as much as $510 million is possible, a $340 million to $380 million estimate may be more realistic "after accounting for properties that could be already rented to primary residents and for the behavioral changes that have followed taxes imposed elsewhere." The comptroller's report added that even higher taxes could have a larger behavioral effect."Behavioral responses to the tax — conversions to rental, primary-residence claims by relatives, sales, and possible legal challenges — introduce further variability that will only become observable after implementation," the report said. "For these reasons, the additional tax should be incorporated into the City's financial plan with a prudent revenue assumption."The comptroller's report suggested that one impact on real property transactions could be initially positive if there is a wave of sales to avoid the tax. But it went on to say, "Broad effects on development or rents ... have generally not been significant. However, concentrated effects on the luxury market could be felt more deeply, as suggested by London's experience."London's policy has been pointed to as a cautionary tale.Abir Mandal of the Tax Foundation, generally viewed as a center-right think tank, says the revenue potential depends heavily on design and enforcement, but even then remains modest relative to housing needs. From the existing pattern across numerous global cities, Mandal said the takeaway is consistent: meaningful in absolute terms, but marginal in fiscal context. Even in Vancouver, one of the most aggressive examples globally, and where vacancy rates did move substantially lower after the tax policy was implemented, vacancy-tax revenue remains relatively small compared with the overall scale of city finances. The Institute on Taxation and Economic Policy, found that Vancouver's tax generated roughly 1% of total city tax revenue.Mandal says empty homes can generate additional tax revenue without additional taxation from another perspective: their lack of drawing on public resources. "The biggest misconception is that these are 'free lunch' taxes on absentee 'speculators' or the ultra-wealthy that raise substantial revenue while improving affordability without economic costs. In reality, second homes, if unoccupied, impose lower marginal service costs (no additional pressure on police, schooling, etc.) while contributing to the tax base — making them net fiscal positives," he said.Potentially better politics than fiscal managementAs to the politically-driven headline issue of whether such tax structures cause mass migration of ultra-wealthy buyers, the evidence globally doesn't suggest that any single tax policy change will have that effect. The consensus among experts is that second-home taxes influence marginal decisions but rarely determine whether wealthy individuals invest in global cities. Brosy described the effect as incremental rather than decisive: "They should certainly shift demand and push prices downward for trophy properties, but they are unlikely to determine whether someone owns in London, New York, or Singapore," Brosy said.However, when combined with broader tax regimes, these tax policies may contribute to gradual shifts in where ultra-wealthy individuals allocate assets, particularly toward lower-tax jurisdictions. Policymakers in Europe and North America increasingly face competition from jurisdictions offering low or near-zero property taxation alongside residency incentives for wealthy investors. Dubai's rise as a magnet for global wealth has sharpened those comparisons, at least before the start of the U.S.-Iran war, which could also have lasting implications. Mandal pointed out that for the ultra-wealthy, it's more a matter of cumulative impact rather than single policy: "Tipping points emerge from cumulative burdens rather than isolated surcharges," he said. Evidence from high-tax jurisdictions, such as California/New York to Florida/Texas migration waves, and UK changes prompting London exits to Dubai, indicate sensitivity among many demographics, not just the ultra-wealthy, including retirees, investment-income reliant individuals, and business owners. U.S. data shows millionaire migration to lower-tax states. A single NYC tax won't empty Manhattan, but combined with existing high costs, it accelerates decisions for those with flexible footprints, "especially with many global cities providing a welcoming haven and strong passports," Mandal said.Politics is another story. The taxes remain highly attractive because they target a narrow and affluent slice of homeowners rather than broad middle-class property owners, as the New York case shows. The appeal of pied-à-terre taxes may ultimately lie less in their fiscal power than in their symbolism: they allow governments to be seen as responding to housing inequality without imposing broader tax increases on full-time residents. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Contracts can be used to hedge against rising GPU rental rates and other operational costs View More

CME Group signage above the former Chicago Board of Trade (CBOT) trading pit in Chicago, Illinois, US, on Thursday, Nov. 13, 2025. Christopher Dilts | Bloomberg | Getty Images A new futures market for semiconductors will let traders hedge their artificial intelligence investments with bets on the increasingly expensive price of computing power.Contracts on the new "compute futures market" from CME Group will be based on graphics processing units (GPU) price indexes from Silicon Data, the companies said in a statement released Tuesday announcing the joint venture, which still is pending regulatory review. The new market will let investors lock in a price for computing capacity based on a GPU benchmark, which can be used to hedge against rising GPU rental rates and other operational costs in the enormous and multifaceted AI buildout."GPU markets ... have historically lacked standardized reference pricing," Carmen Li, chief executive of Silicon Data, said in the release. "The launch of compute futures is an important step toward giving AI builders, cloud providers and investors more reliable tools for valuation, hedging and long-term planning."Futures markets are traditionally associated with basic commodities like foodstuffs, metals, and petroleum products, but they've also popped up for assembled components in rapidly developing segments of advanced industrial sectors.During the broadband explosion in the late 1990s, the broadband services division of Enron aimed to sell unused capacity on its network of fiber optic cables prior to the company's spectacular failure.Silicon Data sells access to specialized price indexes to clients, similar to the consumer price index or personal consumption expenditures price index, except for semiconductors. Its products include a standardized GPU price index, a RAM index and projections for GPU rental prices.Wall Street doesn't see demand for GPUs, or more traditional central processing units (CPUs), slowing down any time soon."Agentic AI requires entirely new racks of CPU servers that sit alongside GPU infrastructure and run to power the work of all these agents," analyst Shawn Kim at Morgan Stanley wrote in a report Monday."The AI system in the future will look like a distributed system consisting of GPU racks for dense model compute … [and] agentic CPU racks for orchestration, processing data and tool execution," Kim said.Memory chip prices soared in the first quarter as AI drove increased demand for CPUs. Hyperscalers increased capital spending across the board while executives expressed concerns about a bottleneck in memory that's driving input costs higher.Memory chip makers are projecting huge profit margins through this year and next as valuations have skyrocketed. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

After the Supreme Court ruled some of President Trump's tariffs unconstitutional, the first wave of tariff refunds have begun flowing in. View More

Containers at the Port of Oakland in Oakland, California, US, on Thursday, March 26, 2026. David Paul Morris | Bloomberg | Getty Images Months after the Supreme Court ruled some tariffs were unconstitutional, the first round of tariff refunds has begun flowing in.Oshkosh Corporation CFO Matt Field confirmed to CNBC that the company has started receiving tariff refunds as of Tuesday."Following acceptance of our initial filing, we have begun receiving payments on our tariff refund claims, representing an initial portion of our total claims submitted," Field said.The company has not yet verified its total refund amount, Field added. Basic Fun, the company behind Care Bears and Tonka trucks, also told CNBC it began receiving tariff refunds on Tuesday.CEO Jay Foreman said the refunds so far have only represented 5% of the company's total claim on its early invoices."We will utilize the refund dollars to help support our 2026 cash flow and invest in our team. This is the toughest time of the year for toy companies," Foreman said in a statement. "We'll also be announcing to our staff that we will be increasing salaries to help offset cost of living increase, announcing promotions and larger merit increases. We are reinvesting the funds in our business and people."Logistics companies UPS, FedEx and DHL have previously said that they will file for tariff refunds on behalf of their customers, requiring no further action from them. The first phase of tariff refunds only covers requests for entries that CBP finalized within the past 80 days, though that process could take months to reach customers.The U.S. Customs and Border Protection said in a court filing that it anticipated paying refunds of $35.46 billion on 8.3 million shipments, as of Monday morning. In February, the Supreme Court invalidated President Donald Trump's tariffs imposed under the International Emergency Economic Powers Act of 1977. In the months that followed, companies began filing for tariff refunds in a portal, called the Consolidated Administration and Processing of Entries. In a radio interview with WABC on Tuesday morning, Trump called the tariff refund situation "crazy.""In theory, you have to pay the tariffs back. We'll fight that," Trump said. "We were taking in fortunes from people that hate us, countries and companies that hate us." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

There is no quick fix to the economic and political damage from the war. View More

In this article.SPX@LCO.1US10YFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO3:2403:24What to expect from the upcoming Trump-Xi summitMarkets and Politics Digital Original Video As President Donald Trump prepares to head to China for crucial negotiations with the leader of the No. 2 global power, it is becoming clear that the political and economic damage unleashed by the Iran war can't be easily left behind. Even if a deal to get oil tankers moving again were reached tomorrow — and there is little sign of that — Americans are facing the prospect of months or more of new inflation worries.The question now isn't whether Trump will secure his war aims with dignity. It is whether his presidency can ever recover from the war's body blow. Iran is at the front of Trump's mind as he prepares to meet Chinese leader Xi Jinping. "We're going to have a long talk about it," Trump told reporters Tuesday as he departed for the trip. "I don't think we need any help with Iran," Trump said. And yet at home Trump is banking little political goodwill from the stock market that keeps grinding to records. The S&P 500 has risen 7.3% since Feb. 27, just before the U.S. and Israel attacked Iran. Meanwhile Trump's net approval rating has fallen to the lowest of his two terms, according to CNBC's All-America Economic Survey. Read more CNBC politics coverageBoeing, Citigroup CEOs set to join Trump on China visit next weekMarco Rubio heads to the Vatican as 2028 presidential buzz ramps upEpstein files: Commerce Sec. Howard Lutnick questioned by House Oversight panel Stocks are rising on faith in artificial intelligence and traders' well-earned sense that Trump will find a way to get out from under major economic risks. But the market is fragile and could fall apart if the disruption continues, analysts with JPMorgan wrote in a note sent to clients Monday. "A temporary shock, even a large one, can be absorbed. A prolonged disruption cannot," the analysts wrote.The analysts conclude that because the mounting damage is so severe, Iran or the U.S. will back off by June. That is a reasonable bet for a Wall Street firm to make, given Trump's prominent decisions to back off on threats over tariffs and Greenland, for instance. But the judgment that the pain will get so intense one side has to back off has grim implications for Americans already struggling to pay at the pump — not to mention Trump's political standing.Oil prices are — counterintuitively — relatively low at the moment, given the scale of the supply disruption. Global benchmark Brent crude futures hit $104 a barrel Monday, up 44% since the start of the war but still below the highs sparked by Russia's invasion of Ukraine in 2022. A gallon of gas cost $4.50 on average in the U.S. on Tuesday, up 44% compared with last May, according to AAA. Diesel is up 61%. Iran has shut the Strait of Hormuz, the narrow passageway that tankers need to transit to reach the Persian Gulf, where they can fuel up in Saudi Arabia and other Middle Eastern energy giants. The closure has meant a fifth of the world's oil supplies can't get through the normal routes. Those countries have gone to great strides to get oil moving again. But there is only so much they can do, Amin Nasser, CEO of the world's largest oil producer, Saudi Aramco, said on an earnings call Monday. "If the current disruptions continue at this rate, the market will lose around 100 million barrels for every week the Strait of Hormuz remains closed," Nasser said.Countries have been able to tap into existing oil inventories to keep their economies stocked with refined products like gasoline and jet fuel. But those stockpiles may be "critically low" by this summer, Nasser said. "If the Strait of Hormuz opens today, it will still take months for the market to rebalance. And if its opening is delayed by a few more weeks, then normalization will last into 2027," Nasser said. That doesn't account for the time it might take to clear mines Iran may have left in the strait, he said. Iran's ambassador to China, Abdolreza Rahmani Fazli, in a Tuesday post on X pressed Tehran's case with Beijing, saying that the relationship between the two is too strong for the U.S. to overcome.The bottom line is that higher energy prices are baked in for the foreseeable future. The price of crude oil makes up about half of the cost of a gallon of gas, according to the Energy Information Administration. And U.S. elections are less than six months away. The 2026 midterm elections will be a crucial referendum on Trump and the Republican Party as they seek to retain a lock on both chambers in Congress.State and federal taxes account for another 18% of gas prices — the reason Trump is pushing for a federal gas tax holiday. Pausing the tax would likely require action by Congress, and if it succeeded could blow back on Americans in other ways. The U.S. Treasury estimates the government will borrow $2 trillion next year to fund the deficit, while the stock of debt rose this month past the psychological threshold of 100% of gross domestic product. Also, gas taxes primarily fund highway maintenance — and every local politician could tell the president that potholes are politically unpopular.Cutting taxes while debt rises amid a costly war would likely put pressure on long-term Treasury yields. The 10-year Treasury note rose to 4.4% on Tuesday. It is the benchmark for great swaths of consumer debt, and a higher 10-year means more expensive rates for mortgages, car loans and credit cards. A rising 10-year also threatens the stock market, because it gives investors a way to get risk-free returns from the government. In other words, there is little Trump can do in the short run to get himself out of the affordability bind the Iran war has created. It will be inescapable for Republicans in the midterms, and will color every choice Trump makes going forward.All that will be the backdrop for Trump's negotiations with Chinese leader Xi Jinping after Air Force One lands Wednesday. Xi has his own problems, but public opinion bites far less severely in a dictatorship than it does in the U.S. Xi can extract a high price if Trump asks for his help ending the Iran war. Or perhaps Xi will simply sit and wait and watch the economic turmoil grow. But in the ever-more zero-sum world Trump has helped make a reality, the U.S. will pay the cost of the Iran war, one way or another. 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The Iran war has pushed up gasoline, groceries and other prices for consumers. View More

In this article@LCO.1Follow your favorite stocksCREATE FREE ACCOUNT Fuel prices are displayed on a sign as customers fill their vehicles at a gas station in Miami, April 13, 2026.Joe Raedle | Getty Images Inflation jumped in April to the highest level in nearly three years as surging gas prices due to the Iran war pushed up the cost of many consumer goods. The consumer price index, a key inflation measure, rose 3.8% in April from a year earlier, the U.S. Bureau of Labor Statistics reported Tuesday. That's up from 3.3% in March.The April data paints a clearer picture of the financial fallout for consumers after what was then more than a month of conflict in the Middle East. "American households are going to continue to struggle trying to manage through this, and that's going to be the case for the foreseeable future," said Mark Zandi, chief economist at Moody's. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); High oil prices create a 'double squeeze' Earlier this week, President Donald Trump rejected Iran's latest proposal to end the war, sending oil futures higher. Iran has continued to restrict energy supplies through the Strait of Hormuz, a waterway used to transport about a fifth of the world's oil. "It's like the aorta artery in your body," said Brian Bethune, an economics professor at Boston College. "When that is choked down, it is the whole global economy that is affected."Oil prices — as measured by Brent crude oil, a global price benchmark — spiked to $118 per barrel by the end of April from roughly $70 per barrel before the conflict began. Prices remain above $107 a barrel as of early Tuesday. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); Products refined from oil, such as gasoline and jet fuel, have risen sharply, too.Gas prices soared about 50% since the war with Iran began on Feb. 28 and are up 28.4% over the year, according to the CPI data. Consumers paid a national average of $4.50 per gallon as of Tuesday, according to AAA — up from about $3.14 a year ago.Airline fares rose 20.7% over the past 12 months, according to the CPI data. Read more CNBC personal finance coverageSocial Security 'break-even' claims get social media buzz — experts urge cautionHere's the inflation breakdown for April 2026 — in one chartTrump said $465,000 in retirement savings is 'rich.' Is it?New college grads overestimate starting salaries by nearly $24,000, report findsCNBC's Financial Advisor 100: Best financial advisors, top firms ranked The sudden and steep rise is an example of how the cost of jet fuel is being passed directly to travelers, said certified financial planner Stephen Kates, a financial analyst at Bankrate. "Consumers are currently trapped in a 'double squeeze,' wrestling with both the acute pain of the gasoline price spike and the slow rise in other core budget items," Kates said. "Households will find it harder to shift budget dollars from one category to another when most major categories are becoming more expensive at the same time." The Iran war's effect on food prices As the conflict persists, the oil shock has put upward pressure on food prices as well, economists said. For example, an increase in diesel prices affects the transportation costs of trucking food to grocery stores, Boston College's Bethune said. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); "It takes some time for the fuel surcharges that are built into these contracts to work their way through the system," Bethune said.Fertilizer is another key export through the Strait of Hormuz, threatening to raise prices for farmers. A customer shops for beef at a grocery store in Los Angeles, April 6, 2026.Justin Sullivan | Getty Images "You can see the pass-through gaining momentum," Zandi said. Food prices increased 3.2% over the last year, according to the CPI data."For most families, what matters most is the cost of a gallon of unleaded gas and a pound of beef, and both are up quite a lot," Zandi said. Beef prices rose 14.8% year over year, according to the CPI data. Inflation may unwind slowly Economists say that the inflationary effects of the war could take weeks or months to unwind.Even if more oil tankers get through the Strait of Hormuz, it may be a while before the whole supply chain starts working again, Bethune said. "If we get some resolution, optimistically, within the next few weeks, it then might be two months for things to start to normalize," Bethune said. "The pessimistic scenario is at least double that or even longer — that could be six to nine months to get back to where we were in January or February," he said. The Fed under pressure The latest inflation reading reinforces expectations that the Federal Reserve will keep interest rates unchanged for a while — doing little to ease consumers' current affordability challenges."The Federal Reserve, soon to be led by Kevin Warsh, is in a very difficult position because it cannot ignore an annual inflation rate climbing back toward 4%," said Bankrate's Kates. "The trajectory of inflation will not immediately reverse, even if geopolitical tensions ease, making it highly unlikely that we will see any interest rate cuts this year," he said. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

India needs to be strategic in a ‘tribal mindset world’, control assets, have a strong P&L View More