"On Friday, Trump said he will scrap tariffs on beef, coffee, tropical fruits and a range of other commodities, even after insisting that his duties haven't raised prices. Given that imported food makes up just 10% of what U.S. households consume, the tariff rollback's impact on inflation is a "practically a rounding error," wrote Bernard Yaros, lead U.S. economist at Oxford Economics, in a note on Friday. But they will have outsized effects beyond the economic data."
""Food prices also weigh heavily on consumers' inflation psychology, not to mention their sentiment," he explained. "Of all major food categories, consumer sentiment is historically most sensitive to the price of meats, poultry, and eggs, followed by cereals." Indeed, sticker shock at the grocery store has fueled demands for more affordability, which was a central issue in the recent elections."
"Despite consumer inflation cooling sharply from 9% in 2022, prices are still ticking up, and tariffs have kept the annual rate sticky-even edging higher since Trump launched his trade war. Voters are now rewarding politicians who promise to freeze certain costs. With both parties already looking ahead to the 2026 midterm elections, Yaros sees Trump providing more tariff relief if his latest move is any indication."
Tariff exemptions were announced for beef, coffee, tropical fruits and other commodities, removing duties that had been in place despite claims they did not raise prices. Imported food comprises roughly 10% of U.S. household consumption, so the direct effect on measured inflation is negligible. Food prices have disproportionate influence on consumer inflation psychology and sentiment, with meats, poultry, eggs and cereals particularly sensitive. Grocery price shocks have driven demand for affordability and influenced recent voting behavior. Tariffs have contributed to stickier annual inflation since the trade war began. The move may presage broader tariff relief ahead of the 2026 midterm elections.
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