Last week, President Donald Trump announced the removal of tariffs on over 200 products, a significant shift in a key administration policy. This decision coincides with his renewed focus on cost-of-living issues amid declining approval ratings linked to affordability concerns.
The rollback has been welcomed by various stakeholders, including the Food Industry Association (FMI), which stated that it is a “critical step” towards enhancing affordability for consumers. The tariffs that were lifted impact commonly purchased items such as coffee and tropical fruits, with economists anticipating a potential decrease in prices for these goods.
A recent projection from Yale’s Budget Lab indicated that Trump’s tariffs, which have added a baseline tax of 10% on imports, are expected to result in a 1.9% increase in food prices in the short term. Historically, U.S. grocery prices have remained relatively stable, averaging an annual increase of just 2% from 2013 to 2021. While the recent executive order does not eliminate all food tariffs, the removal of levies on specific items might provide some relief for consumers.
Anthony Serafino, president of the New Jersey-based fruit importer EXP Group, anticipates a reduction in prices in the coming weeks after increasing them due to earlier tariff impacts. However, experts warn that the overall effect on grocery budgets may be modest, as imports typically comprise less than 20% of U.S. food purchases.
Despite dependence on foreign supplies for certain food items, many essential imports from Mexico have already been exempt from tariffs due to existing trade agreements. Economists like Tufts University’s Sean Cash have expressed skepticism about significant price decreases across the grocery sector, noting that other factors, such as labor costs and localized supply chain issues, contribute to food pricing.
Overall grocery prices have increased by 2.7% over the past year, which is an improvement over the larger increases seen in 2022 and 2023. The Trump administration has indicated that addressing high food prices will take time, and indications show that while some price relief may occur, lasting changes could remain influenced by past pricing trends.
Source: https://www.bbc.com/news/articles/c3eplgwdwdko?at_medium=RSS&at_campaign=rss