Trump Eases Food Import Tariffs as Inflation Concerns Push Policy Reversal

President Donald Trump signed an executive order on November 14, reducing tariffs on many food-imports including beef, coffee, bananas, tropical fruits, nuts, spices and several other agricultural and food items reported Business Standard.

It marks a sharp pivot from his earlier “reciprocal tariffs” policy which applied broad import duties with few exceptions. The new exemptions apply retroactively from November 13, cover over 200 agricultural categories and extend to items even domestically produced. Critics say that the move is an admission that tariffs have driven up consumer costs, while supporters welcome the relief to households, according to Reuters.

In addition, the reversal shows that the administration is shifting from its previous hardline position. Officials had stated there would be no exceptions when the tariffs were first announced in the spring. But as time went on, exceptions were made for goods that were either not made in the US or were not readily available in large enough quantities.

According to the USDA’s Economic Research Service, food-at-home inflation slowed to 1.2% in 2024 — well below its historical norm.

But consumer surveys, like one by Purdue University economists, suggest people still feel food prices are rising faster — indicating a persistent "inflation-perception gap."  Consumers in the Consumer Food Insights survey reported food inflation of 5.3% for 2024, which is lower than inflation perceptions in the previous two years but almost triple official estimates of 1.8%.

Analysts Urge Caution

Economists also warn that earlier tariffs contributed to cost pressures: per-Capital Economics, higher import duties can cascade through the supply chain, causing delayed but lasting price increases.

Meanwhile, analysts caution the reversal may only partially ease cost pressures, as earlier tariffs already anchored higher price levels which may take time to unwind.

Reducing food-import taxes reduces some cost-push inflation, but it won't be sufficient to completely stabilise the markets, according to a JP Morgan report. The report further stated that the core Consumer Price Index (CPI) may still reach about 3.8% by the end of 2025, notably above the US Federal Reserve’s 2% inflation target.