Donald Trump’s plan to lower grocery costs would actually increase them
Economists say that Trump’s tariffs would cause importers to pass costs on to consumers.
Former President Donald Trump said Sept. 17 that his plan to lower grocery costs is to place tariffs on food imports — a policy economists say would do the opposite of his intended goal.
“We allow a lot of farm product into our country. We’re going have to be a little bit like other countries. We’re not going to allow so much — we’re going to let our farmers go to work,” Trump said at a town hall in Michigan moderated by Arkansas Gov. Sarah Huckabee Sanders, who served as White House press secretary under Trump.
Tariffs are taxes levied on imported goods, in this case food. Companies that import those goods — whether it be grocery stores that directly import produce or food production companies that import grain, spices, sugar or other raw materials — are responsible for paying those tariffs. Because tariffs increase those companies’ costs, the companies then pass those price increases down to consumers.
In 2023, about 15% of the United States food supply was imported, according to the Food and Drug Administration. Certain categories of foods are imported at high rates, including 55% of the fresh fruit, 32% of the fresh vegetables, and 94% of the seafood Americans eat, according to the FDA.
Because farmers and fishers cannot quickly ramp up the production of fruits, vegetables, and seafood, the cost of those goods would almost certainly go up if Trump placed tariffs on imports.
“Importers will no doubt pass on the cost to consumers unless they have a reason to eat the cost themselves. As domestic suppliers are unlikely to be able to undercut them on price any time soon (America’s limited coffee farms, for instance, produce nowhere near the amount of coffee Americans drink), consumers are likely to foot the bill,” Stephen Craven, a former trade negotiator for the U.S. Department of Commerce, wrote in an opinion piece for CNN.
A U.S. Department of Agriculture Economic Research Service report in 2021 said removing tariffs on agricultural imports would increase what it called consumer well-being in the United States by $3.5 billion per year.
“Global agricultural trade could increase if tariffs on agriculture were removed or trade costs were reduced,” the report said. “The removal of tariffs could shift resources away from commodities that might be inefficient toward the production of commodities that could be produced more efficiently.”
There is also recent proof that tariffs increase costs for consumers.
In 2017, when he was in the White House, Trump put a 9% tariff on imported washing machines. After that tariff was in place, the consumer price of washing machines rose 9%, according to Justin Wolfers, an economics professor at the University of Michigan.
“I’m exhausted even saying it, but blocking supply won’t reduce prices, and it’s not even close,” Wolfers wrote in a Sept. 18 post on X in response to Trump’s plan to put tariffs on imported food.
