Impact of a President Trump Economy on Your Finances

The “crazy” winter of 2025, with snow hitting Florida, is a fitting metaphor for an economy that has shifted faster than many expected. I previously warned about a “debt snowball in reverse,” where policy changes increase your personal debt even if your spending habits haven’t changed. We experienced last year with the tariffs, which added approximately $1,000 in expenses for the average household.

As we move through the first quarter of 2026, that concern is no longer a “what if.” It is a reality being felt in housing, healthcare, and the job market.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Updated on March 8, 2026.

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The Real Cost of “Most-Favored-Nation” Drugs

In my original post, I worried that overturning Biden’s drug-pricing orders would spike costs. The reality in 2026 is a mixed bag.

President Trump launched TrumpRx.gov and the “Most-Favored-Nation” (MFN) pricing model. While this has actually lowered the price of some high-profile drugs such as Wegovy to $149 and Zepbound to $300, the “debt snowball” still hits elsewhere.

Because these deals are often voluntary negotiations with Big Pharma, many seniors are finding that drugs not on the “favored” list have seen significant price hikes as manufacturers look to recoup margins. If your specific medication isn’t on that website, your out-of-pocket costs may have tripled.

The $500 Billion AI “Stargate” and Your Job

The Stargate Project, a $500 billion AI infrastructure initiative, promised 100,000 new jobs, almost exclusively in high-tech infrastructure and data centers.

For the “rest of us,” the “financial wrath of AI” is hitting home. In early 2026, we’ve seen a cooling in the labor market for mid-level roles. Unemployment edged up to 4.4% in February 2026, and for the first time in years, the economy actually lost 90,000 jobs in a single month. Job growth in 2025 was almost “zero.”

Housing and the Affordability Crisis: The Tariff and Labor “Double Whammy”

My concerns about the $4,000 “tariff tax”, whether on a new car or other everyday products was just the tip of the iceberg. The housing market is currently being squeezed by two major Trump policies:

Tariffs: The recent handling of tariffs has created a volatile “yo-yo” effect, fueling deep market instability. Even after the Supreme Court ruled previous tariffs illegal, the Trump administration bypassed the ruling by citing National Security concerns to implement a new 10% global tariff, which is scheduled to climb to 15%.

We are currently witnessing a dangerous trend with rising costs and falling stability in the housing market. According to recent data from ATTOM, foreclosure activity has now risen on a year-over-year basis for eleven consecutive months as we move into 2026.

Adding fuel to this fire is the administration’s aggressive stance on building materials. In a move that has blindsided the construction industry, the Commerce Department has moved to nearly triple tariffs on Canadian softwood lumber, pushing the combined duty to 34.5% (and in some cases up to 45% when additional Section 232 “National Security” taxes are applied).

The National Association of Home Builders (NAHB) estimates that these tariffs alone add roughly $10,900 to the cost of a new single-family home.

Labor Shortages: The 2025-2026 immigration crackdown has caused a massive contraction in the construction workforce. Net migration actually turned negative in 2025 for the first time in 50 years. When you lose the workers and pay more for the wood because of the tariffs, the “snowball” turns into an avalanche. We are seeing a housing market where supply is stalled, keeping prices high even as interest rates fluctuate.

The Hidden Costs of the DEI Rollback

The elimination of Diversity, Equity, and Inclusion (DEI) has shifted from a political talking point to an economic risk. The White House, through Executive Orders 14151 and 14173, under the guise of a “merit-based system,” the immediate result for many workers is a sudden loss of job security and a lack of legal recourse.

The Trump administration now requires federal contractors to certify under penalty of the False Claims Act that they have scrubbed all DEI-related programs from their operations.

The Financial Risk: If a company is found in “non-compliance” by the DOJ, their federal funding can be frozen or clawed back.

The Impact: When a company loses a government contract, the first thing they cut is the workforce. Your income could vanish overnight due to a policy change you had no control over.

The Financial Cost of Losing Protections

The rollback of the Equal Employment Opportunity (EEO) guidelines, which date back to the LBJ era, effectively removes the “guardrails” that protected employees from arbitrary termination.

Money Lost: In a world without these protections, workers in “at-will” states have almost zero leverage. If you are fired without a clear path for a wrongful termination claim, you lose not just your salary, but your health insurance and retirement contributions.

Professor’s Note: Let’s clear up the “at-will” myth. It doesn’t mean “freedom” for the employee; it means a lack of protection from arbitrary termination. You can be fired for the color of your socks. You can be fired with or without a reason, so long as it is not a mask for discrimination.

The Final Straw: The Iran Conflict and the Energy Shock

If the “snowball effect” of debt was already rolling, the outbreak of war in Iran this month may be the last straw that breaks the camel’s back.

With the U.S. and Israel engaged in major combat operations as of March 2026, we are seeing an immediate reaction in the energy markets. Iran’s move to disrupt the Strait of Hormuz, where  20% of the world’s oil passes through, has increased the price of crude oil.

When we think of gas prices, our first reaction is thinking about how much we pay at the pump, but it’s more than that. It’s a direct hit to the wallet:

The Gas Pump: National gas prices have already jumped by 15 to 34 cents per gallon in just the first week of March. Analysts warn that if the “unconditional surrender” stance continues and the Strait remains blocked, we could see $4.00 or even $5.00 gas within weeks.

The Grocery Store: Remember, fuel doesn’t just power cars; it powers the trucks that deliver your food and the tractors that plant it. High diesel prices lead to higher grocery bills, a secondary “tax” on every household.

The Breaking Point: President Trump has stated, “If they [gas prices] rise, they rise,” betting on U.S. “energy dominance” to carry us through. But for a family already dealing with a housing and affordability crisis, topping off the tank at $100 is when the budget finally collapses.

When you add a war-driven energy spike to a labor shortage and a tariff-driven supply crisis, you’re looking at the perfect financial storm.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link.

You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.

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Photo Credit: This work is in the public domain in the United States because it is a work prepared by an officer or employee of the United States Government as part of that person’s official duties under the terms of Title 17, Chapter 1, Section 105 of the US Code. https://x.com/VP/status/1882163616646132011/photo/1. (Vice-President J.D. Vance’s X page.)