President Donald Trump has eased tariffs on some food items primarily to address rising US grocery prices and alleviate economic pressure on American consumers.
The rollback affects around 200 food and agricultural products. The move to ease tariffs is a response to mounting political pressure following recent election results where voter frustration over the cost of living was a major concern. Economic concerns were a top issue for voters in recent off-year elections, leading to some Republican losses. Easing tariffs is seen as a way to respond to this voter dissatisfaction and demonstrate action on affordability concerns.
The tariffs, which were part of a broader “reciprocal tariffs” regime, were contributing to higher prices for common goods like beef, coffee, bananas and spices. By rolling them back, the US administration aims to lower costs for households. The executive order that implemented the changes followed the announcement of new trade framework agreements with countries like Argentina, Ecuador, El Salvador and Guatemala. These agreements aim to boost US exports to those countries while easing import levies on their agricultural products.
Many of the products on which tariffs were eased, such as coffee and tropical fruits, are not produced in sufficient quantities in the US, meaning the tariffs had little impact on encouraging domestic production but a significant impact on consumer prices. Despite the rollback, Trump has continued to largely insist that tariffs are not the primary cause of inflation, a stance that has been criticised by Democrats and economists who argue otherwise.
While the move is expected to benefit American consumers with lower prices, it has also been welcomed by exporters in countries like India, which can now revive lost demand for products, such as tea and spices, in the US market. The US rolled back a 50% reciprocal tariff that had been imposed on certain Indian agricultural products. These products will now enter the American market duty-free, making them more price-competitive.
The easing of tariffs by the US on several food and agricultural items provides a significant relief and boost to Indian exporters by restoring a level-playing field and opening up market access worth nearly $1 billion annually. The move directly benefits several key Indian export categories that have a strong presence in the US market. This is expected to revive lost demand that occurred after the tariffs were initially imposed.
Indian exporters of spices, tea, coffee, cashew nuts, and certain processed fruits and vegetables are the primary beneficiaries. For instance, India exported over $500 million worth of spices to the US in 2024, and these exports are now more viable.
Indian tea and coffee exporters are expected to see a boost in demand and more favourable market conditions after previously being subject to high tariffs. Indian exports of cashew nuts, which were also impacted by the higher tariffs, will benefit from the exemptions.
Various processed food items are included in the list of exemptions, with the US importing nearly $491.31 million worth of these products from India in FY25. Exports of certain fruits and vegetables, and their derivatives, like mangoes, will see improved access to the US market. Essential oils were among the products that had their additional duties removed.
The rollback also benefits Indian exporters of beef, which was included in the exemption list. India is a major exporter of buffalo beef, making it one of the world’s largest beef exporters. The export industry exists alongside the sensitive and controversial issue of beef consumption within India itself. The export of buffalo meat allows the country to participate in the global meat market while navigating internal cultural and religious considerations that restrict cow beef consumption.
Summing up, the relief from Trump’s easing of tariffs on some food items is expected to support Indian farmers and exporters in the agriculture sector, which is a labour-intensive industry, by providing an opportunity to expand market share and access to a large consumer base. This action is seen as an optimistic sign amid ongoing trade negotiations between India and the US, indicating progress toward a more comprehensive trade agreement.
Despite the potential gains, India’s overall benefit might be limited unless it can scale up operations, improve cold-chain infrastructure (especially refrigerated transport vehicles and cold storage warehouses) and diversify its export basket to better compete with other countries. India should also focus on meeting US regulatory and quality standards, securing necessary registrations like the FDA registration, ensuring compliant packaging and labelling, and addressing logistics challenges like high freight costs.
Building a strong supply chain that includes compliance with both Indian and US food safety laws is essential for success.
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