President-elect Donald Trump’s plan to implement tariffs on imported goods has raised concerns about the impact on the food industry in the United States. According to federal data, the reliance on imported food has been steadily increasing over the years.
In 2022, imported goods accounted for more than 17% of overall food and beverage consumption in the U.S., up from 13.5% in 2013. The value of imported agricultural products has seen a five-fold increase in the past 25 years, with consumer-oriented agricultural goods experiencing a rapid growth due to the demand for seasonal items year-round.
The total value of food imports in 2023 was close to $190 billion, showing a significant increase over the previous decade. The U.S. heavily relies on produce grown abroad, with imports making up 60% of fresh fruit availability and nearly 40% of vegetable supply in 2021.
Trump’s proposed tariffs, including a 10% tariff on all imported goods and higher levies on products from China, are expected to raise prices for consumers. Economists warn that retailers are likely to pass on the added costs to shoppers.
The United States’ reliance on imported food has been rising for decades
Value of U.S. food imports, by year
Experts predict that the tariffs will lead to increased prices for imported goods, including food items. The impact is expected to extend beyond just consumer prices, affecting the costs of manufacturing equipment, packaging, and fertilizer used in the food industry.
While Trump aimed to lower grocery prices during his campaign, experts doubt that the tariff plan will achieve this goal. Grocery inflation has decreased since 2022, but concerns about food prices remain high among consumers.
Arun Sundaram, senior vice president at CFRA Research, believes that grocers may implement strategies to mitigate the impact of tariffs on prices, such as offering smaller packages to offset higher costs. Despite the uncertainty surrounding the scope of the tariffs, the grocery industry is expected to be less affected compared to other sectors.
Overall, the implementation of tariffs is likely to have an inflationary effect on the economy, leading to higher prices for consumers. Companies will need to find innovative ways to manage costs and maintain competitive pricing in the face of these changes.