Trump Slashes More Tariffs as Food Prices Climb

Bernd Weißbrod/dpa via Reuters
By Yuval Rosenberg and Michael Rainey

Happy Friday! The Senate has already started its Thanksgiving recess, but the House was busy this morning voting 285-98 to pass a non-binding resolution denouncing "the horrors of socialism." That vote came hours before New York's newly elected Democratic Socialist Mayor Zohran Mamdani had a White House meeting with President Trump that both men called productive. "I expect to be helping him, not hurting him," Trump said of Mamdani at a surprisingly chummy joint press appearance afterwards.

The House vote also capped a week in which the chamber's lawmakers also took five separate votes on measures to censure a few fellow members of Congress - but made precious little concrete progress on, say, funding the government or addressing the surge in health insurance costs. Here's what else we're watching.

Trump Slashes More Tariffs as Food Prices Climb

President Trump eliminated tariffs on an array of Brazilian agricultural goods amid signs that high and rising prices in the U.S. for basic groceries such as coffee and beef have become a major political problem for his administration.

In an executive order signed late Thursday, Trump removed the 40% tariff he had imposed in July on all Brazilian imports as punishment for the way the country had treated Jair Bolsonaro, the right-wing populist and former president who is now serving a prison sentence for attempting to undermine an election. Last week, Trump cut a separate 10% tariff he had imposed on the country's products. Together, the tariff reductions effectively eliminate the import taxes he had imposed on the South American powerhouse, which typically buys more from the U.S. than it sells.

In 2024, the U.S. imported more than $2 billion worth of coffee from Brazil, the world's largest producer. It also imported billions of dollars' worth of meat, orange juice and sugar, as well as a variety of fruit, spices and vegetables. The prices of most foods have risen since Trump took office, with coffee prices rising nearly 20%.

Spinning the cuts: The tariff reductions are a bit tricky politically for the White House, since Trump and members of his administration have insisted that tariffs do not raise prices for consumers - making it hard to explain why cutting them would make prices fall.

Earlier this week, Council of Economic Advisers Chair Kevin Hassett pushed back against the idea that Trump's tariffs were an important factor in rising grocery prices, telling Jonathan Karl of ABC News that "the prices for those goods weren't necessarily going up just because of tariffs." But asked if prices would remain where they are even if tariffs are cut, Hassett said with certainty that prices would fall - because the tariffs are being cut.

Commerce Secretary Howard Lutnick told Fox Business Network that Trump was reducing tariffs to make a fresh start on his trade policy. "What happened is the president said, 'Look, it's been six months. It's time. Let's just wipe the slate clean. If people haven't made deals with these smaller countries, it's OK. Let's cut the price on all these unavailable natural resources, and let's focus on affordability,'" he said.

Lutnick added that Trump will bring "all" of the prices down. "He's going to use the power of what he has created to bring these prices down, so that by Christmas, the prices in America are lower and lower," he said.

Trade experts, though, warn that it will take time for food prices to adjust, assuming they move lower at all, as supply chains catch up with Trump's latest unilateral adjustments. "The effects of this executive order will not be felt by consumers for an extended period of time," Phil Kafarakis, CEO of the food industry association IFMA, told CNBC. "We might see some relief for tomatoes and strawberries in the spring."

Trump's Tariffs Will Raise $1 Trillion Less Than Previously Estimated: CBO

The Congressional Budget Office on Thursday slashed its revenue projections for Trump's tariffs, reducing estimated savings from the tariffs by $1 trillion over 11 years.

In August, the CBO estimated that revenues from Trump's tariff hikes would reduce federal budget deficits by $3.3 trillion from 2025 to 2035, with an additional savings of $700 billion generated by lower spending on a smaller pile of debt. Now, the CBO estimates that the direct budgetary savings will come to $2.5 trillion, with another $500 billion in savings on interest payments.

CBO Director Phillip Swagel said in a blog post that new data accounted for about two-thirds of the downward revisions in the projections. Among other things, Trump reduced tariffs on some imports from China, Japan and the European Union. In August, the CBO estimated that the average effective tariff rate on all imports was 20.5%. As of November, that estimate has been reduced to 16.5%.

Swagel noted that the CBO may have to revise its projections again, depending on how the tariffs are implemented and how legal challenges to Trump's unilateral actions play out. In addition, Trump may change his policies once again, possibly by exempting more goods from his import taxes. "If mechanisms for additional exemptions were implemented, the tariff duties collected could decline substantially," Swagel wrote.

GOP Scrambles for a Healthcare Fix

Congress is still scrambling to come up with a plan to address rising healthcare costs and the Affordable Care Act subsidies set to expire at the end of the year. As part of the deal to end the shutdown, the Senate faces a mid-December deadline for a scheduled vote on a bill of some sort, but it remains highly uncertain whether lawmakers can come up with a plan that might get enough bipartisan support to pass.

"Prospects look dim for Congress to agree to an extension of ObamaCare's enhanced subsidies, as Republicans run headlong toward a December cliff without a clear plan to break their fall," The Hill's Nathaniel Weixel wrote Friday.

Spurred on by President Trump's opposition to the enhanced Affordable Care Act subsidies and his call to provide healthcare funds directly to individuals, Republicans in the House and Senate continue to work on their own concepts for a broader overhaul of the healthcare system.

Sen. Bill Cassidy continues to push his plan, which would replace the enhanced ACA tax credits with pre-paid Health Savings Accounts, but Democrats have warned that the Cassidy proposal would undermine gains made under the Affordable Care Act and would drive Americans to sign up for "junk" insurance plans that leave them vulnerable if they get sick.

Sen. Rick Scott of Florida on Thursday released another alternative to enhanced Obamacare subsidies, centered on allowing Obamacare enrollees to have a "Trump Health Freedom Account," similar to a health savings account.

Those plans all face significant obstacles, and as Republicans debate the issue, Trump on Friday offered his own timeframe for a healthcare fix. The president reportedly said in an interview with Fox News Radio that Scott and Republican Sen. Katie Britt of Alabama are working on a plan that he hopes will be done by the end of January. That would be after the ACA subsidies expire.

"We have a Jan. 30 day coming up. I'd like to see if we could do it by then," Trump said. "They say, 'well, let's go another year.' And I said, 'let's see if we can get it done by Jan. 30.'"

Those nebulous efforts may reduce any chance that GOP moderates can succeed in convincing Trump and others in their party to get behind a short-term extension of the ACA subsidies, buying time for negotiations on longer-term reforms. But that push is ongoing: "Republican senators have been privately lobbying President Donald Trump to support a limited short-term extension of Obamacare subsidies, arguing it would save the GOP from a 2026 drubbing and buy time for Congress to pass a longer-term health care plan that mirrors the president's preferences," Punchbowl News reports. "A short-term extension of the Obamacare subsidies could mean one, two or even three years, with strict eligibility crackdowns, such as income caps and anti-fraud provisions. A Trump-led push would provide political cover for vulnerable Republicans; it would also save Thune from having to deal with a divided conference."

The bottom line: Lawmakers still don't have consensus on a plan to address the expiring subsidies and prevent a serious spike in premium payments.

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