Social Security

Goodbye Social Security 2026 COLA: how Trump’s tariffs could affect Social Security payments

Trump’s new tariffs could unintentionally boost your Social Security benefits by increasing the 2026 COLA—but experts say there’s a catch. Here’s a look

Corina González Greg Heilman

Update: Apr 10th, 2025 23:48 EDT

President Donald Trump’s proposed tariffs are making headlines again—and they could have an unexpected impact on millions of Americans receiving Social Security and Supplemental Security Income (SSI) benefits.

In what’s shaping up to be a new phase of the U.S.–China trade war, Trump recently announced sweeping reciprocal tariffs on dozens of countries. While most nations will face a temporary 10% tariff for the next 90 days, China is being hit much harder—with tariffs jumping to a staggering 145%.

At first glance, this might seem like just another political or economic maneuver. But there’s more at stake for everyday Americans—especially seniors and people with disabilities—than it might seem.

How Trump’s trade war could affect your Social Security payments

Several economists warn that aggressive tariffs like these could drive up inflation across the country. And inflation plays a direct role in how the Social Security Administration (SSA) calculates its Cost-of-Living Adjustment (COLA)—a yearly increase meant to help benefits keep up with rising prices.

If Trump’s tariff strategy leads to higher prices on goods and services, that inflation could result in a larger-than-expected COLA in 2026.

But before you get too excited, here’s the reality: a higher COLA doesn’t always mean you’re better off.

Why a higher COLA might not feel like a raise

The COLA boost is designed to help Social Security recipients maintain their purchasing power in the face of rising costs. But in practice, it often fails to keep up with the actual expenses older Americans face.

While your monthly benefit may go up slightly, those gains are usually outpaced by the rising cost of essentials like housing, healthcare, and groceries—areas where inflation tends to hit retirees the hardest.

So even if 2026 sees a bump in benefits due to Trump-era tariffs, most recipients won’t see a major improvement in their financial well-being.

What is COLA, and how is it calculated?

Every fall, the SSA reviews the year’s inflation data to determine the following year’s COLA. Specifically, the agency uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Here’s how it works:

The SSA compares the average CPI-W for July, August, and September of the current year to the same period the previous year.
The percentage difference becomes the COLA.
That COLA is applied to benefits starting January 1st of the following year.

This adjustment affects all types of Social Security benefits, including:

Retirement
Survivors
Social Security Disability Insurance (SSDI)
Supplemental Security Income (SSI)

What’s the forecast for 2026?

Nonpartisan watchdog group The Senior Citizens League—one of the largest advocacy organizations for older Americans—slightly increased their estimate after to take into account Trump’s tariffs. Currently, they forecast that the COLA for 2026 could be around 2.3%.

While not especially high, this estimate assumes relatively modest inflation. If tariffs drive prices higher than expected, that number could increase significantly.

The official 2026 COLA announcement is scheduled for October 2025, and any adjustments will kick in with January’s Social Security checks.