President Donald Trump’s upcoming blanket tariffs, scheduled to take effect on August 1, are poised to drive up prices for a range of grocery items, according to a new analysis by the Tax Foundation.
The policy, aimed at boosting demand for American-made products, may lead to significant price hikes for foods like coffee, fish, and beer, which heavily rely on imports.
The Tax Foundation’s report highlights that 74% of the $221 billion in U.S. food imports in 2024 are subject to tariffs ranging from 10% to 30%.
If the August 1 plan proceeds, these rates could climb above 30% for some countries, directly impacting consumers.
The top five imported foods by volume—liqueurs and spirits, baked goods, coffee, fish, and beer—comprise 21% of total U.S. food imports and are particularly vulnerable.
“Certain items, like Brazilian coffee or bananas, have limited or no domestic production,” said Alex Durante, senior economist at the Tax Foundation.
“This leaves consumers with little choice but to pay more or forgo these staples.”
Short- and Long-Term Price Impacts
A parallel study from The Budget Lab at Yale projects that food prices could rise by 3.4% in the short term, with fresh produce potentially seeing increases as high as 6.9%.
Over time, prices are expected to stabilize but remain 2.9% higher for food overall and 3.6% higher for produce.
These estimates suggest a noticeable hit to household budgets, especially for lower-income families who spend a larger share of their income on groceries.
Durante noted, “We could see large price movements in the coming months if the administration sticks to the August 1 deadline.”
Current grocery inflation, already up 2.4% from last year based on June data, does not yet reflect the full impact of the proposed tariffs.
Limited Domestic Alternatives
While the Trump administration argues that tariffs will encourage domestic production, experts point out that many affected foods, such as coffee and bananas, cannot be produced at scale in the U.S. due to climate and land constraints.
Fish, another major import, faces similar challenges, with the U.S. relying heavily on foreign sources. This lack of viable substitutes could force consumers to absorb higher costs or shift to less preferred alternatives.
The White House maintains that foreign exporters, not U.S. consumers, will bear the tariff costs.
“The cost of tariffs will be borne by foreign exporters who rely on access to the American economy,” said spokesperson Kush Desai, citing a Council of Economic Advisers analysis showing a decline in imported goods prices from December to May.
However, economists argue that businesses typically pass tariff costs to consumers, especially for goods with inelastic demand like food.
Broader Economic Concerns
The Tax Foundation warns that the tariffs could act as a regressive tax, disproportionately affecting lower-income households.
A separate analysis estimates that the tariffs could increase household costs by $1,300 annually, with food being a significant driver.
As the August 1 deadline approaches, consumers may face tough choices at the grocery store, balancing budgets against rising prices for everyday essentials.
Also Read: Economists Now Say Prices Will Continue To Rise, “This Is Just The Beginning”
Visit the Homepage for our extensive library of news, or read news for you below.
About The Author
