Trump Orders Major Rollback of Food Tariffs to Combat Inflation
Executive order reverses long-standing protectionist policy, aiming to lower grocery bills for American consumers by easing duties on key imports like beef and coffee.
WASHINGTON – In a significant reversal of his administration's long-standing trade policy, President Donald Trump signed an executive order on Friday to eliminate tariffs on a wide range of imported food products. The move is a direct acknowledgment of the intense political and economic pressure from persistently high grocery prices that have strained American household budgets.
The order, which takes effect immediately, lifts duties on key staples not produced in sufficient quantities domestically, including coffee, bananas, cocoa, and certain tropical fruits, as well as imported beef and some fertilizers. The White House framed the decision as a necessary step to provide "swift relief" to consumers grappling with the rising cost of living.
This policy shift marks a dramatic departure from the administration's signature protectionist stance, which imposed a baseline 10% tariff on most imports. While President Trump has previously insisted that import duties were not a primary driver of inflation, Friday's action suggests a recalibration of economic priorities amid growing voter concern over affordability. The decision follows a series of state and local elections where the cost of living was a central issue for voters,
Shares of major food producers and retailers were mixed in Friday trading as investors digested the implications of the policy change. Companies in the consumer staples sector, which have been navigating a difficult inflationary environment, now face a new landscape. The Kraft Heinz Co. (NASDAQ: KHC), a bellwether for the industry, closed the day's session at $24.85. The company, with a market capitalization of nearly $30 billion, has seen its revenue growth affected by cost pressures throughout the year.
The tariff rollback is expected to lower input costs for food manufacturers and distributors, potentially easing pressure on profit margins. Industry groups, which had long campaigned against the broad-based tariffs, welcomed the news. The Food Industry Association issued a statement calling the move "a positive development that will help mitigate some of the cost pressures our members face."
Economists believe the measure could have a modest but noticeable impact on headline inflation figures in the coming months. "Removing tariffs on food is one of the most direct tools the White House has to influence grocery prices," noted one analyst. The exemptions are targeted at products where import duties are more likely to be passed directly to consumers, making the policy a potent, if belated, tool in the fight against inflation.
The executive order also comes on the heels of new framework trade agreements with several Latin American countries, including Argentina, Ecuador, and Guatemala. These deals, once finalized, aim to further secure supply chains for agricultural products and formalize the tariff exemptions. While the immediate impact on grocery store shelves remains to be seen, the administration is betting that this decisive pivot on trade policy will provide both economic and political dividends.