US Think Tank: "Trump's Food Tariff Cuts to Reduce Household Burden by $35 a Year" ... 'A Drop in the Bucket'

PIIE Report Released
Total Tariff Burden per Household at $1,700... Limited Impact from Food Tariff Reduction

A recent food tariff reduction measure by the Donald Trump administration is expected to lower annual household consumption spending in the United States by an average of $35, according to an analysis. However, considering that the overall household burden from tariff policies approaches $2,000 per year, this move is being described as a mere drop in the bucket.

Donald Trump, President of the United States. Photo by UPI

On the 27th (local time), the Peterson Institute for International Economics (PIIE), a U.S. think tank, stated that President Trump signed an executive order on the 14th exempting hundreds of food products from tariffs, estimating that tariffs imposed on approximately $85 billion worth of imports per year would be reduced as a result.

Previously, President Trump announced a measure to exempt reciprocal tariffs on hundreds of agricultural and livestock products in response to rising grocery price pressures.

PIIE explained that this measure would eliminate a total of $4.6 billion in tariffs annually, and if this is divided among 133 million U.S. households, it could result in a reduction of about $35 in annual spending per household.

The tariff reduction applies to a wide variety of foods popular with American consumers, including meat, vegetables, fruits, coffee and tea, cocoa, and nuts. According to the research, if the tariff reductions are fully reflected in retail prices, bananas could see a price decrease of about 2.6%, coffee 7.3%, and nuts 6.8%. The effect is expected to be more pronounced for low-income households.

However, PIIE pointed out that the impact of this measure is limited compared to the overall effects of the Trump administration’s tariff policies. The Yale Budget Lab, affiliated with Yale University, estimated in a report released after the food tariff exemption measure that the Trump administration's tariff policies have resulted in an average additional annual cost of $1,700 per U.S. household. In comparison, the $35 reduction is seen as only a partial relief.

PIIE assessed that this measure "partially restores the historical practice of not imposing tariffs on a variety of foods and primary food products that are not produced in the United States."