President Trump on Friday signed an executive order that reduces his tariffs on a variety of grocery items amid growing concerns at the White House that voter unhappiness over high and rising prices has become a serious political problem.
Goods seeing exemptions from the “reciprocal” tariffs Trump imposed on trading partners around the world in August include beef, tomatoes, coffee, bananas and avocados, and the list of newly exempted products reportedly includes more than 100 items.
The administration is portraying the shift as the logical next step now that the tariffs have achieved the president’s goals, including new trade agreements with a handful of countries. But the move to reduce tariffs runs counter to one of Trump’s central claims: that tariffs do not raise prices. Cutting tariffs over concerns about rising prices tacitly acknowledges what the vast majority of economists believe to be true: that import taxes raise prices for U.S consumers.
“Wait. If lowering tariffs lowers prices, what does raising tariffs do to prices?” Erica York of the Tax Foundation, who has been critical of Trump’s tariff policy, wrote on social media.
Trump has tried to downplay the issue of affordability, even as Republicans worry that high prices played a central role in the losses they were dealt on Election Day. In an interview with Laura Ingraham of Fox News earlier this week, Trump claimed that “we are doing phenomenally well—this is the greatest economy we’ve ever had.”
The president rejected the idea that complaints about prices have any basis in reality, though he admitted that one consumer item has seen price increases. “Their talking points, ‘Oh costs are high, costs are high’ — the only thing is beef,” he said. “Beef is a little high because the ranchers are doing great.”
But inflation has turned higher since Trump announced his tariffs in April, with the annual inflation rate hitting 3.0% in September, the most recent data available. Economists say Trump’s tariffs have played a central role in the rising inflationary pressure. In one notable example, coffee prices have jumped 19%, driven in part by a 50% tariff Trump imposed on imports from Brazil, the world’s largest coffee producer.
Still, Trump’s move Friday may not provide complete relief on the prices of some basics, including coffee. His executive order removes only 10 percentage points from that 50% tariff rate on Brazil, since his reciprocal tariff on the country was 10%. The remaining 40% tariff, which was imposed to punish the country for its treatment of one of Trump’s political allies, will reportedly remain in place.