Expect to Pay More for These Groceries Because of Tariffs
The scope of President Donald Trump’s trade war changes by the day. Beyond sending the stock market into disarray and consumer confidence plummeting to 1980s levels, the tariffs are expected to increase inflation to historic highs, particularly in key sectors that center on imports.
The global food supply chain is complex, but groceries will be affected by tariffs in a specific way. Due to the climate, some foods, such as coffee and bananas, simply can’t be grown en masse in the US.
The latest on Trump’s tariffs
Just last week, Trump threatened new tariffs on countries that don’t comply with his trade demands.
China, the recipient of the most aggressive tariffs and the US’s third largest trading partner shows no signs of concession.
Trump also claimed in an interview with Time to have made 200 deals though, notably, none have been publicly announced.
If you’re just catching up
On April 2, Trump announced sweeping tariffs on dozens of countries, including China, Japan and the European Union. One week later as the tariffs were set to go into effect, he paused the majority of the tariffs for 90 days. Conversely, the sweeping tariff on Chinese imports was increased to 145%, Politico reports. In response, China increased tariffs against the US to 125%, bringing the US-China trade war to a boil.
Your groceries might get more expensive if Trump’s sweeping tariffs come to fruition.
On April 9, just hours after Trump announced a 90-day pause, CNET spoke with Russell Hillberry, a professor of agricultural economics at Purdue University, to learn how the “reciprocal” tariffs could affect grocery costs for shoppers in the US.
Here’s everything you need to know about what is happening right now and what could happen if the additional tariffs go back into effect, according to Hillberry.
Read more: Thinking About a Costco Membership? Here’s How Much Cheaper Groceries Are
Do tariffs implemented by the US cause prices for US consumers to rise?
“Yes.” Hillberry said. “The US gets different products from different areas of the world. The goods are being sold for a certain amount and when they arrive at the port [in the US], there’s an extra charge on top of whatever the value is at the port.”
That means that if items are imported to the US from China right now, when that item gets to the US, there will be an extra 145% charge on top of the original buying price when it arrives at the port. The majority of that extra cost from tariffs is typically passed on to the consumer.
If the tariff was 10%, he estimated that roughly only 8% of that extra cost would be passed on to the consumer, which wouldn’t make too much of a jaw-dropping difference to consumers especially on lower-cost items, such as groceries. However, the larger the tariff, the larger the price increase.
Initially, the tariffs varied. For example, the EU — where the US gets a lot of its wine and cheese — is facing a 20% tariff with more potential tariffs on the horizon.
Watch this: Should You Buy Now or Wait? Our Experts Weigh In on Tariffs
Will grocery prices increase because of tariffs?
If all of the tariffs that Trump announced on April 2 go into effect after the 90-day pause, Americans can expect to see an increase at the grocery store — and possibly a change in what’s available on the shelves.
While China is not a large importer of food for the US, many of the countries that were slapped with tariffs on April 9 (before the pause) are.
Read more: These Fast Food Chains Hiked Their Prices the Most Last Year
Will certain products disappear all together?
The tariffs may cause supply issues that lead to empty shelves and fewer options for shoppers.
This is a possibility if the tariffs go back into effect, according to Hillberry.
“One thing that isn’t appreciated by the president is that countries have other buyers they can sell to,” Hillberry said. “So if we decide we don’t want them, they’ll sell them somewhere else. And it may be that the supply chain can’t justify the added costs that go with the tariffs, so some things might not be there.”
Seafood
Seafood is one food category that may get significantly more expensive from tariffs.
“The things that [the US] doesn’t produce at scale, especially fish and shrimp, are coming largely from Asia, India, Vietnam, places like that,” Hillberry said. “So those are going to be up 20 to 50% at the port and maybe a little bit less at the grocery store.”
Coffee and bananas
Most coffee beans are imported, which puts them at risk for a price hike.
While most foods will still be available, tariffs will cause a price spike and potential scarcity in key imports.
“Coffee and bananas are going to come in, for sure, they’ll just be more expensive,” Hillberry stressed. “I wouldn’t expect these things to vanish but I think you can expect less variety available at the supermarket because of the tariffs. But the main effect will be on prices.”
Tomatoes and avocados
Adding guac to a burrito bowl may become even pricier in 2025.
Many of the avocados, tomatoes and berries that the US consumes are grown in Mexico, so those products could also see a price hike related to tariffs.
Fruit in general
Much of the fruit we buy at the supermarket is imported from countries subject to tariffs both now and when the 90-day pause goes back into effect.
Wine and liquor
Canadian whiskey has already been subjected to tariffs.
Wine imported from Europe and liquor that comes from Canada, Mexico and parts of Asia are expected to jump in cost as tariffs continue to roll out.
What are the chances the sweeping tariffs go back into effect?
It is unclear but before the pause, Hillberry predicted that the Trump administration would abandon the tariffs because they’re too painful or that Congress would step in to stop the tariffs, which could happen if they go back into effect.
“I really don’t think that these are permanent features of the landscape,” Hillberry said. “But, you know, once tariffs go up, it does take a while for them to go down again. So I would think that on the food angle, things will be more expensive, not as good, lower quality, and some goods will disappear.”