President Donald Trump has reversed course on a key economic policy, canceling import tariffs on over 200 food items in a move that tacitly acknowledges their role in rising consumer prices, following recent Democratic electoral successes.
The exemptions, effective retroactively to November 13, cover staple goods like coffee, beef, bananas, and orange juice. This decision marks a significant shift from his previous stance that his imposed tariffs were not contributing to inflation.
When questioned about the measure, Trump conceded that his tariffs “may” have increased prices “in some cases.” However, he maintained that the U.S. as a whole experienced “virtually no inflation.”
The policy change comes after Democrats secured several victories in state and local elections across Virginia, New Jersey, and New York City. Voter concern over affordability, particularly high food costs, emerged as a dominant issue in these contests.
American consumers have faced notable price hikes on many of these exempted items. Ground beef prices climbed nearly 13% and steak nearly 17% year-over-year in September, marking the largest increases in over three years.
Bananas saw an approximate 7% increase, and overall costs for food consumed at home rose 2.7% in September. Persistent livestock shortages, despite the U.S. being a major beef producer, contributed to the elevated meat prices.
The White House framed the tariff removals as a result of “significant progress” in establishing balanced bilateral trade relations. Officials stated that tariffs were lifted on foods not grown or processed domestically, aligning with several new trade agreements.
Earlier, the administration announced trade framework agreements that, once finalized, would eliminate tariffs on some imports from Argentina, Ecuador, Guatemala, and El Salvador. U.S. officials are considering additional agreements before year-end.
Separately, Trump reiterated his intention to distribute $2,000 payments to low-to-middle income Americans. He stated these payments would be funded by future customs duty revenues.
“Customs duties allow us to pay dividends if we want to do so,” Trump said. “Now we will pay dividends and we will also reduce debt.”
Democratic lawmakers swiftly criticized the administration’s move. Representative Richard Neal, a Democrat on the House Ways and Means Committee, accused the Trump administration of “putting out a fire they started and claiming it’s progress.”
Neal added that the administration was “publicly admitting what we all knew from the start: Trump’s trade wars are increasing costs for people.” He pointed to rising inflation and manufacturing contraction since the tariffs were first implemented.
Economists have largely attributed rising consumer goods prices, in part, to import tariffs. They warn that these costs could escalate further next year as companies begin to fully pass on tariff burdens to consumers.
Trump had previously imposed a baseline 10% tariff on imports from all countries, alongside additional specific tariffs. Recently, he has emphasized affordability concerns, while consistently blaming former President Joe Biden’s policies, not his own tariffs, for rising costs.