These Groceries May See a Price Spike Because of Tariffs

These Groceries May See a Price Spike Because of Tariffs

The scope of Trump’s trade war changes by the day. Beyond sending the stock market into disarray and crushing consumer confidence back to 1980’s levels, the tariffs are expected to increase inflation to historic highs, particularly in key sectors that center around on imports. 

The global food supply chain is complex, but there’s a specific way that groceries will be affected by tariffs since some foods such as coffee and bananas simply can’t be grown en masse in the US due to climate. 

The latest on Trump’s tariffs

Just this 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’ 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. 

A hand holding a shopping list in a grocery store aisle.

Your groceries might get more expensive if Trump’s sweeping tariffs come to fruition.

LordHenriVoton/Getty Images

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 moreThinking 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 [or tariff] 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 European Union — 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

Watch out for skyrocketing seafood prices

Over an ocean, a rope mechanism is carrying a large white box filled with reddish crabs.

Seafood is one food category that may get significantly more expensive from tariffs. 

Getty Images

“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.”

Will certain products disappear all together?

tibken-trader-joe-s-sf-nob-hill-on-sunday-all-that-s-left-is-high-fiber-cereal-and-flaxseed-meal

The tariffs may cause supply issues leading to empty shelves and fewer options for shoppers.

Shara Tibken/CNET

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.” 

Coffee and bananas could jump in cost

coffee beans

Most coffee beans are imported, which puts them at risk for a price hike.

IMAGEMORE

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.”

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.

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.” 

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