President Donald Trump signed an executive order to sweep tariff exemptions for a range of food products, including common products like coffee, bananas, beef, avocados, and tomatoes. The administration officially justified the recent action by stating that an insufficient amount of the product could be produced domestically. However, this decision represents a significant policy reversal by the Trump administration, as it follows mounting pressure over the rise in prices for food products and a poor electoral performance by the Republican Party in recent elections. Eceonomists have long warned that the cost of Trumps baseline 10% tariffs would be passed directly to consumers, which has been validated by the 2.7% increase in grocery prices over the last year.
The tariff exemptions represent a direct acknowledgment by the Trump administration that the tariffs are contributing to the rising cost of living, contradicting the president's past dismissal of affordability concerns. The administration also announced that it would lower import taxes on coffee and bananas as part of the framework trade deals with four Latin American countries, aiming to tackle the jump in US coffee prices of around 20% in the last year.
