How Trump's tariffs could affect your grocery bill

The Hill

5 days ago

President Trump's wide-ranging tariffs scheduled to go into effect Friday could raise food and grocery prices by several percentage points, according to analyses by two think tanks.
The Yale Budget Lab estimated Monday that food prices would rise 3.4 percent in the short-run and stay 2.9 percent higher in the longer term. The Tax Foundation calculated that about 75 percent of the country's food imports would be impacted by the tariffs in some way, notably liquor, baked goods, coffee, fish and beer.
Alex Durante, an economist with the Tax Foundation, said many people might choose to eat the cost of the tariff because many agricultural products don't have immediately available domestic alternatives.
'You can't make French wine in, say, California because then it ceases to be French wine,' he said. 'To that extent, consumers might have limited availability to switch to alternatives and they might just simply continue paying the tariff burden prince.'
That said, not every item in Americans' grocery baskets could see price increases.
Many agricultural products from Mexico and Canada, including some fruits, vegetables and meat products, are reportedly exempt under a trade agreement negotiated during Trump's first term.
Potential duties on other imports and countries are still being worked out. Trump struck a trade deal with the European Union this week that established a 15 percent duty on goods from the bloc. But wine and spirits, for instance, still need to be negotiated, European Commission President Ursula von der Leyen said this week.
'The Administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American economy, the world's biggest and best consumer market,' a White House spokesperson told CNBC this week.
The Hill reached out to the White House for comment.
Here are five staples in your grocery cart that could see a price hike.
Fish and seafood
Canada, which makes up more than 15 percent of U.S. seafood imports, the most of any country, is currently locked in trade negotiations with Trump's trade representatives. The president's threat of a 35 percent tariff on the U.S.'s northern neighbor posed in April would reportedly exempt goods that comply with a trade deal negotiated during his first administration.
Goods primarily produced in North America are tariff-exempt under the U.S.-Mexico-Canada agreement (USMCA).
Indonesia (7.6 percent of U.S. seafood imports) will face a 19 percent tariff rate under a trade deal announced by the U.S. last week. Vietnam (6.9 percent) agreed to a 20 percent tariff, down from a 46 percent rate originally threatened by Trump.
Coffee
Brazilian coffee, which accounted for nearly a quarter of the country's 2024 coffee spending, could face a 50 percent tariff, along with all other imports to the U.S. Trump made the move in order to pressure the country's judiciary to drop the prosecution of Jair Bolsonaro, the former Brazilian president facing charges after his supporters stormed government buildings in early 2023.
Switzerland, the source of 13.4 percent of American coffee imports, could also face a 31 percent rate. Trump also threatened tariffs on Colombia (16.8 percent of coffee imports) in January but later rescinded them.
The average retail price of coffee is already up about $1 compared to what it cost in January.
Rice
The U.S. relies on Thailand, which could be subject to a levy as high as 36 percent, for more than half of its imported rice. The Southeast Asian nation's finance minister said Tuesday that he expected trade talks to be completed before Aug. 1 and that the final tariff rate would be lower than what Trump initially threatened, Reuters reported.
India, another major importer, is also in trade talks with the U.S. Trump on Wednesday announced a 25 percent tariff on the country.
Food Business News estimated in April that America's foreign rice supply faced an average added tariff of 33 percent.
Rice exports from American producers have also been a sticking point for the Trump administration during negotiations with Japan, with the U.S. pushing to have more American rice bought in Japan tax-free.
Alcohol
Mexico, America's top source of spirits including tequila, is facing down a 30 percent tariff starting Thursday. The country also accounts for more than 83 percent of beer exports to the U.S.
Domestic beer producers could also be impacted, the Cato Institute argued in July, because they depend on aluminum for cans and ingredients like hops, malts, and sugar imported from other countries.
Any levies on wine imports from France and Italy remain to be negotiated as part of the EU's larger trade agreement with the US. New Zealand, another top source of wine (7 percent of U.S. imports), is subject to Trump's general 10 percent tariff increase but has not yet seen another duty imposed on top of that.
Chocolate
If the USMCA remains in place, Canadian and Mexican chocolate will continue to be exempt from American tariffs, regardless of where they source their cocoa.
Several chocolate makers in Mexico and Canada told Reuters that the new tariffs actually boosted their businesses over American manufacturers, who have to import their cocoa from overseas that is tariffed under Trump's policies.
Ivory Coast (9.4 percent) faces a reciprocal tariff of 21 percent, a move that the country's agriculture minister said in April would lead to higher cocoa prices.