Craig Shapiro, a macro strategist at The Bear Traps Report, says that President Donald Trump’s approach to inflation management is not that unlike “running a protection racket,” one that is built on coercion and intimidation, rather than the use of monetary tools.
What Happened: “Trump isn't fighting inflation with traditional tools,” Shapiro said on Monday, in a post on X, adding that “He's managing it like a boss running a protection racket.”
According to Shapiro, Trump’s strategy hinges on behavioral enforcement via public shaming, regulatory threats, and backroom pressure tactics to influence corporate pricing behavior, instead of fiscal and monetary controls.
See Also: As US Dollar Sinks, Top Economist Warns 10% Slide Could Spark New Inflation Spike
He cites several examples of this, starting with his “eat the tariffs” remark to Walmart Inc. (NYSE:WMT), the tariffs threat to Mattel Inc. (NASDAQ:MAT) and Apple Inc. (NASDAQ:AAPL), and so much more.
Shapiro calls this model “Protection Racket Capitalism,” where major corporations like Walmart, Apple, and Exxon Mobil Corp. (NYSE:XOM) play the role of capos expected to enforce price discipline in their respective sectors. “Maintain discipline in your territory, or else,” he says.
“Meanwhile,” he says, Trump is using other policy tools, such as running deficits, imposing tariffs and pursuing deregulation, all of which he says are inflationary, while the “narrative is being held together by intimidation.”
The biggest vulnerability, according to Shapiro, is structural inflation. “You can jawbone Walmart,” he says. “You can threaten refiners. But you can't jawbone the rent.”
In conclusion, he states that if core inflation metrics were to reaccelerate in late-2025, this entire “Boss Economy” model could unravel, revealing a fragile narrative being held together, not by policy strength, but by optics and intimidation.
Why It Matters: This is precisely what Economist Peter Schiff had warned several months ago when Trump had asked Walmart to “eat the tariffs” and not pass on the costs to consumers.
“Trump said Walmart should eat the tariffs. He might as well tell Walmart to eat its rent, wages, insurance, utilities, and all of its other costs too,” Schiff said.
Besides this, Yardeni Research President Ed Yardeni, believes that Trump’s tariffs have not been inflationary thus far, because falling oil and goods prices are providing a deflationary backdrop.
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