Donald Trump Slashes Food Tariffs Amid Rising Inflation
Synopsis
Trump's exemptions arrived a day after the United States reached trade framework agreements with four Latin American countries. It includes 10 per cent tariffs on most goods from Argentina, Guatemala, and El Salvador, while 15 per cent tariffs from Ecuador. According to the new trade agreements, duties were also removed on certain products not grown or produced in the US in sufficient quantities, such as bananas and coffee. The latest announcement, on 200 items, is expected to bring the prices down. The items range from oranges, acai berries, and paprika to cocoa, chemicals used in food production, fertilizers, and even communion wafers.
Amid rising anger among American consumers over the high cost of groceries, US President Donald Trump exempted certain agricultural imports like coffee, cocoa, bananas, and a few beef products from his higher tariff rates.
Media reports say that the new exemptions took effect at midnight on Thursday. This marks a reversal by him who had been insisting his sweeping import duties on various countries would not fuel inflation.
Trump's exemptions arrived a day after the United States reached trade framework agreements with four Latin American countries. It includes 10 per cent tariffs on most goods from Argentina, Guatemala, and El Salvador, while 15 per cent tariffs on Ecuador.
According to the new trade agreements, duties were also removed on certain products not grown or produced in the US in sufficient quantities, such as bananas and coffee.
The latest announcement of exemptions, over 200 items, is expected to decrease the year-over-year price hikes. The items range from oranges, acai berries, and paprika to cocoa, chemicals used in food production, fertilizers, and even communion wafers.
Citing the reason for taking the decision on exemptions, the Trump administration said that these items were not grown or processed in the United States.
In September, ground beef was nearly 13 per cent more expensive, while bananas and tomatoes were priced 7 and 1 per cent higher. So the exemptions were seen as mandatory.
CPI Inflation Data:
For several years, the rising food prices have affected US households. As per the Consumer Price Index data, released by the US Bureau of Labour Statistics, the CPI for all urban consumers rose 0.3 per cent on a seasonally adjusted basis in September. Earlier in August, it rose 0.4 per cent.
Over a period of 12 months, the all-items index increased 3 per cent before seasonal adjustment, following its surge of 2.9 per cent over the 12 months
ending August. The food index rose 3.1 per cent over the last year, while the energy index increased 2.8 per cent.
Among others, in September, the dairy and related products index declined 0.5 per cent, the index for food rose 0.2 per cent, the food at home index increased 0.3 per cent, while the index for meats, poultry, fish, and eggs rose 0.3 per cent.
On the energy parameters, the index surged 1.5 per cent in September, after it surged 0.7 per cent in August. In 12 months, the index for energy increased by 2.8 per cent.
Apart from food and energy, the index for all items surged 0.2 per cent in September, after rising 0.3 per cent in each of the preceding 2 months, says the data.
Similarly, the index for airline fares rose 2.7 per cent in September, after rising 5.9 per cent in August. In the same month, the medical care index increased 0.2 per cent. In total, the index for all items less food and energy rose 3.0 per cent over the past 12 months.
The recent data was delayed because of the government shutdown.
Previous Tariffs Imposed By Trump:
Earlier, the US administration had imposed high tariffs on beef imports from major suppliers, including Brazil, Australia, New Zealand, and Uruguay.
The US has imposed a 75 per cent tariff on Brazil, considered the world’s second-largest beef producer, and this resulted in driving down imports into the US to a nearly 75-year low.
On Brazilian coffee, Trump had imposed 50 per cent tariffs. Similar rates have been imposed on Vietnam, Colombia, and other major exporters.
What Experts Say:
Though the tariff exemptions by Trump won praise from many industry groups, several experts expressed disappointment.
Economists stated that grocery prices may become more expensive in 2026, citing that companies would pass on the full brunt of the import duties imposed on them by the US President.
Trump, in 2025, had upended the global trading system with a 10 per cent base tariff on imports from every country. Apart from this, he also has imposed additional specific duties which that vary from state to state.
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