The good news, if you please, is that the price of weight loss drugs Ozempic and Wegovy has dropped by 90 percent, thanks to expiry of the GLP-1 patent. The bad news is that the prices of pretty much everything else are on the way up and the value of savings is travelling down the chart. The world is now facing a classic double whammy—of access and affordability. And there is only one way to describe the phenomenon—we are suffering from Trumpflation!
Since his return to the Oval Office as No 47, Donald J Trump has tried retired ideas to rewrite definitions, rearrange terms of engagement and redraw contours of the world order. His tariff tactics upended global trade. Ironically, prices in the US inched up while China ended 2025 with a record trade surplus of $1.2 trillion. The loss in the Supreme Court hasn’t deterred Trump—old clauses are being arranged for his cause.
Meanwhile, America’s trade deficit is at $900 billion, the fiscal deficit higher at $1.78 trillion, and debt is at a record $39 trillion. In 2026, Trump has set out to recast the equilibrium across geographies that happen to be oil-rich—first in Venezuela and now Iran.
The war in West Asia, imposed by the US and Israel on the world, is now three weeks old. The reasons for the war—beyond the word salads being served—seem vague and vacuous. The conduct of the campaign is turning out to be a chapter in the book on how not to! A fifth of global energy supplies pass through the Hormuz Strait and strikes on Iran were bound to trigger retaliation and choking of supplies.
The US President claimed, “Nobody expected that. We were shocked.” The surprise is incredulous as Director of National Intelligence Tulsi Gabbard and CIA Director John Ratcliffe testified before Congress that Trump had been warned about the fallout.
The US President came to power promising to ensure affordability. This week, average petrol prices at American pumps edged towards the $4-a-gallon Rubicon and mortgage rates shot past 6.2 percent. Investors found themselves poorer as the S&P500 lost over $1 trillion in market cap in a week, savers exited from exchange-traded funds as gold prices dipped below $4,500 an ounce, and silver slid from the $80s to the $60s. Add to this the $200 billion Trump has asked for to fund his war.
In India, a combination of shortage and higher costs has driven businesses to a pause, migrant workers to community kitchens or home, and gig workers to worrying about fuel costs and the economics of eroding volumes. Last week, investors lost over Rs 13 lakh crore in a day as Nifty50 created a record for single-day fall on March 19. The next day, the rupee hit a record low at 94 to the dollar, creating a bearish spectre. In just three weeks of March, foreign institutional investors have dumped stocks worth over Rs 75,000 crore.
The fear of inflation is global. The monetary committees of the US Federal Reserve, the Bank of England and the European Central Bank met this week. To use a term from ornithology, the doves who promised rate cuts have all turned into hawks, signalling rates will be higher for longer.
US Fed Chair Jerome Powell virtually ruled out a cut, ECB Chief Christine Lagarde warned the outlook for inflation was up and that of growth down, and Bank of England Governor Andrew Bailey said the war had put paid to the prospect of a rate cut and even warned about a possible hike.
The war and disruption of supplies have triggered what is being described as a molecular contagion. There are over 6,000 products derived from crude oil and natural gas—beyond fertilisers and feedstocks. Consider this. India is the pharmacy of the world, producing over 60,000 different variants. This requires access to active ingredients. Crude oil is a ‘soup’ of hydrocarbons that allows extraction of chemicals to produce medicines—for instance, the primary raw materials to produce paracetamol.
The molecular dependency is not limited to fuels that are critical for powering the economy. It includes a host of products including polymers and plastics, synthetic fibres, speciality chemicals, dyes, pigments, agri-chemicals, detergents, a wide range of textiles, construction materials and industrial coke. Each of the products then feeds into the services economy, creating what Adam Smith described as the confluence of invisible hands.
Mind you, this is just the beginning of Trumpflation.
The headline Brent crude price, which has shot up from under $70 to over $119 a barrel, shapes perceptions. But some prices are higher—DME Oman is over $162 and Dubai above $137. Jet fuel has shot up from $80 to over $200 ($250 a barrel in Singapore), diesel is averaging above $4.10 a gallon in the US, and in Rotterdam propane prices are at over $700 per tonne. The IMF has warned that a prolonged war and higher level of prices will dampen job creation and growth.
Trump’s moves are long on rhetoric and short on detail—his action frequently defeats the stated intent. The global economy is, effectively, being pushed into the trenches of lower growth and higher inflation. Trump has declared “obliteration” of Iran’s facilities and “victory”.
Yet, his administration is moving thousands of troops for a possible next phase. Trumpflation will define 2026 and the time-tested caveat, “You break it, you pay for it”, is effectively inverted. Trump breaks it, and the world pays for it!
Read all columns by Shankkar Aiyar
Shankkar aiyar
Author of The Gated Republic, Aadhaar: A Biometric History of India’s 12 Digit Revolution, and Accidental India
(shankkar.aiyar@gmail.com)