US administration plans broad tariff exemptions to curb rising food prices

By Ana Swanson, Maggie Haberman &Tyler Pager

 

The Trump administration is preparing broad exemptions to certain tariffs in an effort to ease elevated food prices that have provoked anxiety for American consumers, according to three people briefed on the actions. 

The change would apply to certain reciprocal tariffs the president announced in April, including on products coming from countries that have not struck trade deals with the administration, the people said, discussing a pending announcement on the condition of anonymity. 

The exemptions are expected to include beef and citrus products, although the people cautioned that President Trump had not made a final decision. 

If the proposal goes forward, it would be the latest rollback of one of the president’s key economic policies over growing concerns about affordability, even as Trump has insisted — wrongly — that prices are down. Last week, Democrats won elections around the country in large part by harnessing worries about the cost of living. 

The plan likely to take effect goes beyond the exemptions that Trump proposed in September in an executive order, which would have been confined to products that are not primarily made or grown in the United States, and which are purchased from countries with which the Trump administration has struck trade deals. 

That order directed Howard Lutnick, the commerce secretary, and the US trade representative, Jamieson Greer, to decide on exemptions for more than a thousand product categories, including metals and minerals, antibiotics, plane parts, and foreign agricultural products including coffee, pineapples, avocados and vanilla beans. 

If the administration chooses to offer exemptions for products from countries that have not entered into trade agreements with the United States, that could risk appearing to reward countries that did not try to work with the administration. 

Officials at the Office of the US Trade Representative and the Department of Commerce declined to comment. 

The executive order the administration issued in September specified that such exemptions would apply to tariffs set through the trade agreements the Trump administration has negotiated with other governments, a list that includes the European Union, the United Kingdom, Japan, South Korea, Indonesia, Malaysia and a few other nations. On Thursday, the Trump administration announced four more trade deals, with Argentina, Guatemala, El Salvador and Ecuador. Trump imposed double-digit tariffs on countries globally in April, but has reduced those levies for governments that strike trade deals. 

Scott Bessent, the Treasury secretary, said on Fox News Wednesday that the administration would be making “substantial” announcements about tariff exemptions over the next few days, saying that they would target “things we don’t grow here.”

He named coffee, bananas and other fruits. “So that will bring the prices down very quickly,” he said. 

The administration’s push to try to reduce food prices comes after Democrats won key elections in last week’s off-year elections with candidates that focused heavily on affordability and a promise to bring down costs. 

Even before the elections, administration officials have been concerned about high prices at American grocery stores, which have worsened the president’s approval rating. 

But not everyone in the administration agrees that such broad exemptions from tariffs are wise. Exemptions could further rankle ranchers and farmers who are a powerful political bloc for the Trump administration. In recent weeks, Trump clashed with American ranchers over a plan to buy more beef from Argentina, currently a tiny source of US imports, in a move the president said would lower domestic prices. It’s also not clear how much of an effect the tariff exemptions would have on US prices.  The new trade agreements announced on Thursday, with Argentina, Guatemala, El Salvador and Ecuador, will open up those markets to US exports. 

The official said that the administration expected to see a positive effect on prices from exemptions on items like coffee, cocoa and bananas.