How will Trump’s tariff rollback affect grocery prices

US President Donald Trump rolled back tariffs on more than 200 products, including popular items such as coffee, bananas, and spices. The decision, seen as a concession on a key White House policy, came as the administration turned its focus to rising cost-of-living concerns. Polls had shown that affordability issues were impacting both White House approval ratings and Republican candidates in recent elections.

The tariff rollback was widely hailed by industry groups, particularly the Food Industry Association (FMI), which called the move a "critical step" towards improving affordability. Other business organisations also praised the decision, which aims to reduce the cost burden on consumers, BBC writes.

However, while the political gesture is notable, the practical impact on food prices may be less dramatic than it initially appears. According to the Budget Lab at Yale, Trump's tariffs are expected to drive up food prices by 1.9% in the short term. This is significant, given that grocery prices in the US have historically risen by just 2% annually between 2013 and 2021.

The White House order removed tariffs on certain items, particularly those that the US does not produce, such as coffee, tropical fruits like bananas, and various spices. For goods where domestic production is limited or non-existent, experts and businesses expect the tariff rollback to help lower prices, potentially in the near term.

Anthony Serafino, president of the New Jersey-based fruit importer and distributor EXP Group, said he plans to lower prices in the coming weeks, after raising them earlier this year to offset the impact of tariffs.

“We were just passing through costs. We're not going to keep prices elevated just to keep prices elevated,” Serafino said. “It might take a few weeks for shoppers to see the difference, since we have to sell items we brought in before the change. But we expect this decision to be a 'big help.'”

Despite this, the overall effect on household grocery budgets may remain relatively modest. While the US heavily relies on imports for certain categories like fresh fruit and seafood, imports make up less than 20% of total food and beverage purchases, according to the USDA. Furthermore, many food imports from Mexico—America's largest foreign food supplier—were already exempt from tariffs due to the USMCA trade agreement.

"You will certainly see it on certain products," said Sean Cash, a professor of food economics at Tufts University. "I don't think we're going to see a lot in terms of the average price of groceries coming down."

Food companies are still grappling with higher costs from tariffs on materials like aluminum, which is used in the production of canned foods. Items like wine, cheese, and palm oil were not included in the tariff rollback. Additionally, other factors unrelated to tariffs, such as rising labor costs and adverse weather conditions affecting coffee and cattle supplies, have contributed to recent price increases.

“If we got rid of trade barriers on food items and food commodities, would that make food cheaper in the U.S.? Yes, a little bit, but not that much, because most of what we're buying are services,” said Daniel Sumner, a professor of agricultural economics at the University of California, Davis. “Costs like border inspections, washing, trucking fees, and supermarket workers all factor in.”

Overall, grocery prices rose by 2.7% over the 12 months leading up to September. While this is a significant decrease from the sharp hikes seen in 2022 and 2023, when grocery prices surged by 11.4% and 5%, respectively, food prices remain a prominent issue for US consumers.

Trump administration officials have framed high food prices as a problem inherited from the Biden administration, while acknowledging that correcting the situation will take time. In a briefing last week, White House officials cautioned that while reducing grocery prices was the goal, it was not a guaranteed outcome.

Walmart, Target, and Kroger did not respond to requests for comment regarding the tariff rollback.

Economists suggest that food prices tend to fluctuate more than other consumer goods, and some relief may be forthcoming due to the renewed focus on affordability. However, Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University in Canada, warned that even if tariffs are lifted, high prices may leave a lasting impact on the market.

“The tide goes up, it leaves a mark on the dock and that line remains,” Charlebois said. “If tariffs disappear, you will see that mental mark remaining and industry tends to work with that mark.”

By Sabina Mammadli