Food Stocks Rally as Trump Rolls Back Tariffs on Coffee and Beef
Executive order offers relief to a sector battered by inflation, potentially lowering input costs for restaurants and food processors and boosting margins.
The U.S. food and beverage sector received a significant boost Friday after President Donald Trump signed an executive order rolling back tariffs on key agricultural imports, including coffee, beef, and a range of tropical fruits. The move sparked a rally among restaurant chains and food processors, which have been grappling with soaring input costs and persistent inflation for much of the year.
The executive order, which takes effect retroactively, exempts over 200 agricultural products from the administration's "reciprocal tariffs," according to reports from The Washington Post. This policy shift is expected to provide immediate financial relief for companies heavily reliant on these commodities, potentially easing pressure on profit margins squeezed by months of rising expenses.
This development offers a lifeline to an industry that has faced considerable headwinds. Throughout 2025, food and beverage companies have battled elevated costs for raw materials, labor, and packaging. A recent industry analysis showed that 60% of food and beverage businesses reported a direct negative impact from tariffs implemented earlier in the year, which had raised the effective rate on many imported goods. This environment forced many operators, from large chains to independent restaurants, to pass costs onto consumers through higher menu prices.
Shares of companies dependent on the affected commodities responded positively in early trading. Tyson Foods (TSN), one of the world's largest processors of beef and pork, saw its stock climb as investors anticipated lower costs for imported beef. Starbucks Corporation (SBUX), the global coffeehouse giant for whom coffee beans are a primary input cost, also experienced a notable uptick. Similarly, restaurant chains like Texas Roadhouse (TXRH), whose brand is built on serving hand-cut steaks, benefited from the prospect of reduced beef prices.
The tariff rollback is designed to address consumer affordability and high grocery prices, a persistent issue that has weighed on the economy. The White House stated that many of the exempted goods, which also include bananas, cocoa, and tea, are not produced in sufficient quantities domestically to meet U.S. demand. By easing import levies, the administration aims to lower costs throughout the supply chain, with the potential for savings to eventually reach consumers.
For companies like Tyson, Starbucks, and Texas Roadhouse, the financial implications are direct. Lowering the cost of goods sold can lead to expanded gross margins, giving companies more flexibility to invest in growth, manage debt, or return capital to shareholders. The relief is particularly timely, as it comes ahead of the holiday season, a critical period for both the restaurant and grocery industries.
Analysts will be closely watching to see how quickly these cost reductions flow through company financials and whether the savings are passed on to consumers in the form of stable or lower prices. While the executive order provides immediate relief, the long-term outlook will depend on the stability of this new trade policy and the broader trajectory of global inflation. For now, however, the tariff rollback has provided a welcome dose of optimism for an industry that has been under relentless pressure.