Why these companies are lowering prices despite rising inflation and looming tariffs | Money [Video]

New York (CNN) — Inflation is heating up, a trade war is brewing and American consumers aren’t feeling great about the economy. That’s a toxic mix for businesses.

Inflation rose last month to its highest level since June, topping 3%. Prices at the grocery store remain elevated, with eggs rising 15.2% in a single month, according to January’s Consumer Price Index. Earlier this month, Walmart — widely considered to be a bellwether for the US economy — forecasted slower sales growth for this year. Meanwhile, President Donald Trump’s trade war with China, Canada and Mexico could cost American families $1,200 more per year, according to the Peterson Institute.

And while many businesses are planning to pass those costs on to consumers, some are hoping their decision not to will make them stand out.

As consumers tighten their purse strings, they will become more discerning and competition for their spending will only grow, experts say. Brands will have to …