US president Donald Trump on Friday rolled back tariffs on more than 200 food products, including such staples as coffee, beef, bananas and orange juice, in the face of growing angst among American consumers about the high cost of groceries.
The new exemptions – which took effect retroactively at midnight on Thursday – mark a sharp reversal for Mr Trump, who has long insisted that the sweeping import duties he imposed earlier this year are not fuelling inflation.
“They may in some cases,” raise prices, Mr Trump said of his tariffs when asked about the move aboard Air Force One on Friday evening. But he insisted that overall, the US has “virtually no inflation.”
Democrats have won a string of victories in state and local elections in Virginia, New Jersey and New York City, where growing voter concerns about affordability, including high food prices, were a key topic.
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Mr Trump also told reporters aboard Air Force One that he would move forward with a $2,000 payment to lower- and middle-income Americans that would be funded by tariff revenues at some point next year. “The tariffs allow us to give a dividend if we want to do that. Now we’re going to do a dividend and we’re also reducing debt,” he said.
The Trump administration announced framework trade deals on Thursday that, once finalised, will eliminate tariffs on certain foods and other imports from Argentina, Ecuador, Guatemala and El Salvador, with US officials eyeing additional agreements before year’s end.
Friday’s list includes products US consumers routinely purchase to feed their families at home, many of which have seen double-digit year-over-year price increases. It includes more than 200 items ranging from oranges, acai berries and paprika to cocoa, chemicals used in food production, fertilisers and even communion wafers.
The White House, in a fact sheet on the order, said it came on the heels of “significant progress the President has made in securing more reciprocal terms for our bilateral trade relationships”.
It said Mr Trump decided certain food items could be exempted since they were not grown or processed in the United States, and given the conclusion of nine framework deals, two final agreements on reciprocal trade, and two investment deals.
Ground beef, as of the latest available data for September, was nearly 13 per cent more expensive, according to Consumer Price Index data, and steaks cost almost 17 per cent more than a year ago. Increases for both were the largest in more than three years, dating back to when inflation was nearing its peak under Mr Trump’s predecessor, Democrat Joe Biden.
Although the US is a big beef producer, a persistent shortage of cattle in recent years has kept beef prices high.
Banana prices were about 7 per cent higher, while tomatoes were 1 per cent higher. Overall costs for food consumed at home were up 2.7 per cent in September.
The tariff exemptions won praise from many industry groups, while some expressed disappointment that their products were excluded from the exemptions.
“Today’s action should help consumers, whose morning cup of coffee will hopefully become more affordable, as well as US manufacturers, which utilise many of these products in their supply chains and production lines,” FMI-Food Industry Association president Leslie Sarasin said in a statement.
Distilled Spirits Council president Chris Swonger said excluding spirits from the European Union and Britain “is yet another blow to the US hospitality industry just as the critical holiday season kicks into high gear”.
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“Scotch, cognac and Irish whiskey are value-added agricultural products that cannot be produced in the United States,” Mr Swonger said.
Asked if further changes were planned, Mr Trump told reporters aboard Air Force One, “I don’t think it’ll be necessary.
“We just did a little bit of a rollback. The prices of coffee were a little bit high, now they’ll be on the low side in a very short period.”
Mr Trump has upended the global trading system by imposing a 10 per cent base tariff on imports from every country, plus additional specific duties that vary from state to state.
He has focused squarely on the issue of affordability in recent weeks, while insisting that any higher costs were triggered by policies enacted by Mr Biden, and not his own tariff policies.
Consumers have remained frustrated over high grocery prices, which economists say have been fuelled in part by import tariffs and could rise further next year as companies start passing on the full brunt of the import duties.
The top Democrat on the House of Representatives Ways and Means Committee, Richard Neal, said the Trump administration was “putting out a fire that they started and claiming it as progress”.
“The Trump administration is finally admitting publicly what we’ve all known from the start: Trump’s Trade War is hiking costs on people,” Mr Neal said in a statement. “Since implementing these tariffs, inflation has increased and manufacturing has contracted month after month.” – Reuters
