The ripple effects of President Donald Trump’s sweeping tariff strategy are beginning to show, with new data and expert analyses suggesting that U.S. consumers could soon face significantly higher prices for everyday food products — and worse still, the most severe economic consequences may still lie ahead.
Trump’s latest wave of tariffs, scheduled to take full effect on August 1, aims to force a reorientation toward American-made goods. But economists warn that this strategy is creating distortions in supply chains, especially for food items the U.S. cannot produce at scale, such as Brazilian coffee or bananas.
According to a new analysis from the Tax Foundation, the U.S. imported $221 billion worth of food products in 2024, many of which already face tariffs ranging from 10% to 30%. The August levies, if implemented fully, could push rates beyond 30% for some imports.
The top five imported food categories by volume—liqueurs and spirits, baked goods, coffee, fish, and beer—make up about 21% of total U.S. food imports. Consumers are already seeing a shift: grocery prices are up 2.4% from a year ago, but economists say the worst is yet to come. A report from The Budget Lab at Yale forecasts that the new tariffs will push food prices 3.4% higher in the short term, with a sustained 2.9% increase in the long run. Fresh produce could initially spike by nearly 7%, before leveling off at a 3.6% increase.
Alex Durante, senior economist at the Tax Foundation, explained that some items have no real domestic alternatives, forcing Americans to pay higher prices or go without.
“In some cases, U.S. consumers may decide to pay more for these imported food products rather than choosing a substitute,” he said.
The White House insists that the pain is being felt primarily by foreign exporters. “The Administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American economy, the world’s biggest and best consumer market,” said spokesperson Kush Desai.
He pointed to a recent White House Council of Economic Advisers report showing that the price of imported goods, measured via the personal consumption expenditure index, actually declined between December and May.
But market analysts and independent economists see a more troubling picture forming—one that suggests U.S. households will carry a greater share of the burden, and that this policy path may be steering the country into a stagflation scenario.
Torsten Sløk, chief economist at Apollo Global Management, warned earlier this month that the most damaging effects of Trump’s tariffs are not immediate, but lagging.
“They need to wait to see the peak,” Sløk said, referring to the Federal Reserve’s cautious stance on interest rate adjustments. “We have really only had the take-off stage,” he added, cautioning that inflationary pressures are still working their way through the system.
Sløk projects that toward the end of the year, the full brunt of the tariffs could manifest in a dangerous economic blend of high inflation and sluggish growth—conditions ripe for stagflation, which the U.S. hasn’t faced on this scale since the 1970s. The concern is that as prices rise, consumer spending could slow, especially among lower- and middle-income households, creating a drag on economic momentum that may extend well into 2025.
What makes this situation particularly volatile is the timing. The Federal Reserve has been holding off on rate cuts, banking on the idea that inflation is cooling. But as tariff-driven price increases begin to surface in essential goods like food, the Fed may find itself stuck between the need to tame inflation and the risk of stifling growth.
“We could see some large movements in prices over the next few months if the administration holds firm to that Aug. 1 deadline,” Durante told CNBC.
If the analysis holds true, American households will not only feel the squeeze at grocery stores but may also see broader price increases across other sectors, including consumer goods and transportation. The outlook paints a precarious economic trajectory in which political strategy and economic stability are now on a collision course, with ordinary Americans caught in the crossfire.
