An analysis from two think tanks suggests that the broad tariffs, which are set to start on Friday, could lead to an increase in food and grocery prices by a few percentage points.
The Yale Budget Lab estimated that food prices might jump by 3.4% in the short term, and about 2.9% in the long term. The Tax Foundation noted that approximately 75% of the country’s food imports would be impacted by these tariffs, particularly affecting items like alcohol, baked goods, fish, and beer.
According to economist Alex Durante from the Tax Foundation, many consumers might choose to absorb these cost increases.
He pointed out, “You can’t produce French wine in California, for example, because it just wouldn’t be French wine anymore. So, consumers could find themselves switching to alternatives and, in essence, just paying the price due to these tariffs.”
However, not every item in American grocery carts is expected to see price hikes.
Many agricultural products from Mexico and Canada, like certain fruits, vegetables, and meats, are reportedly exempt under a trade agreement from Trump’s first term.
There are still ongoing discussions about the obligations of other importing countries. Recently, Trump criticized a trade deal with the European Union, which includes a proposed 15% duty on goods from the EU. Yet, details about wine and spirits still need to be hashed out, as noted by Ursula von der Leyen from the European Commission.
A White House spokesperson asserted that the administration believes that the costs of tariffs will ultimately be borne by foreign exporters reliant on the US market, which is the largest consumer market globally.
The Hill sought comment from the White House.
Looking at the grocery basket, here are five staples that may see price increases.
Fish and Seafood
Canada, making up over 15% of US seafood imports, is currently in trade negotiations with Trump’s representatives. The president had threatened a 35% tariff on Canadian goods earlier this year, though some items may be exempt under previous trade agreements.
Foodstuffs primarily produced in North America should be free from tariffs, as outlined by the US-Mexico-Canada Agreement (USMCA).
Indonesia, accounting for 7.6% of US seafood imports, could face a tariff of 19%, while Vietnam may see a 20% tariff based on a recently announced agreement.
Coffee
Brazilian coffee, which represents nearly a quarter of US coffee spending, could encounter a 50% tariff. Other imports from Brazil have come under scrutiny due to legal pressures on former President Bolsonaro.
Switzerland, contributing 13.4% of American coffee imports, might face a 31% tariff, while talks about tariffs on Colombian coffee imports (16.8% of the total) had been suspended earlier this year.
The average retail price of coffee has already risen by about a dollar since January.
Rice
The US heavily relies on Thailand for rice, which could see a 36% tariff on more than half of rice imports. Thai officials mentioned that trade discussions are expected to conclude before August 1, with a lower final tariff rate anticipated.
India, another major rice exporter, recently announced a 25% tariff during negotiations with the US.
Food Business News indicated that foreign rice supplies facing tariffs could average around 33%.
The US also exports rice, with ongoing negotiations with Japan aimed at increasing the import of American rice without tariffs.
Alcohol
Mexico, the primary source of American spirits like tequila, is currently facing a 30% tariff. This nation also supplies over 83% of beer imports to the US.
Domestic beer producers could be adversely affected, as they depend on aluminum for cans and other ingredients sourced from abroad.
Discussions over tariffs on wine imports from France and Italy remain unresolved in the EU trade negotiations. New Zealand also faces a general 10% tariff without additional obligations.
Chocolate
If the USMCA stays intact, chocolates from Canada and Mexico will continue to be exempt from tariffs, no matter the cocoa source.
Several chocolate manufacturers in these countries reported that the new tariffs have inadvertently benefited their businesses compared to American firms.
The Ivory Coast, which accounts for 9.4% of US chocolate imports, is facing a mutual tariff of 21%. Cocoa prices were noted to be rising earlier this year.
