President-elect Trump’s campaign promise to alleviate the financial strain of grocery prices on Americans may prove ironic, as experts warn his proposed tariffs could worsen the situation.
High inflation and economic concerns dominated the recent election. Consumers faced record-high inflation due to the pandemic and global conflicts, resulting in grocery prices nearly 25% higher in 2024 than pre-pandemic levels (Consumer Price Index). A significant portion of voters deeply worried about the economy voted for Trump (AP survey).
However, Trump’s proposed 10-20% tariffs on all imports, potentially reaching 60% on Chinese goods, are likely to increase grocery costs.
David Ortega, a food economist at Michigan State University, states that these tariffs will likely raise prices instead of lowering them.
Trump asserted that tariffs would boost American manufacturing and counter unfair trade practices, claiming other countries, not consumers, would bear the cost. He declared a commitment to tariffs at a campaign rally.
Yet, experts disagree. If implemented, consumers will likely feel the impact at the checkout.
Felix Tintelnot, an economics professor at Duke University, explains that while importers initially pay tariffs, they often pass these costs onto consumers by raising prices.
A Peterson Institute for International Economics study estimates that Trump’s tariffs could cost the average American household $2,600 annually, disproportionately affecting low-income families. Walmart’s CEO indicated potential price increases if the tariffs are enacted.
Imported goods like coffee, bananas, and cocoa are particularly vulnerable.
Ortega points out that tariffs also impact domestically produced goods, as many U.S. manufacturers rely on imported intermediary goods such as fertilizer, equipment, and packaging. These increased costs are passed to consumers.
Retaliatory tariffs are another concern. Following the 2018 tariffs on China, China retaliated with tariffs on soybeans, prompting a $28 billion taxpayer-funded aid package for affected U.S. farmers.
Unlike the 2018 tariffs targeting specific goods, the current proposals are far broader, suggesting a more significant impact on consumers. Tintelnot anticipates larger price increases this time due to the widespread nature of the tariffs.