The Trump administration announced late last week it was removing its tariffs on certain food products. Imported items like coffee and tea, bananas, beef and fruit juices will no longer have an extra reciprocal tax applied when they enter the country.
What does this latest tariff modification mean for Texas?
Ray Perryman, president and CEO of the Perryman Group, an economic analysis firm based in Waco, joined Texas Standard to give a breakdown.
Coffee
Perryman said the shift may have a small impact on the price of things like coffee, but it could be marginal. That’s because he says other factors, like the climate, have resulted in poor crops and, thus, a pricier cup of joe.
“Bringing down the tariffs will certainly help to some extent on coffee, but the biggest problem is they just had a a bad crop,” Perryman said. “There’s just not enough supply out there.”
Beef
Where’s the beef? Well, it might just be coming from Argentina, following a move from President Trump. But Perryman says that initiative and the shift of tariffs is unlikely to result in a dramatic change on the price found in grocery stores.
That’s because, Perryman says, most imported beef from South America goes into ground beef.
“It’s not appropriate for steaks and things like that. So it’s really a fairly limited impact that it has,” Perryman said.
Perryman also pointed to a shortage of cows that has yet to rebound since the pandemic as being a sticking point for the rising price of beef.
Produce
Perryman said the biggest impact and change consumers could see from the policy shift will likely be on produce, like bananas and oranges.
But while Perryman says getting rid of the tariffs would be a welcome shift, the other issue driving up inflation comes from the administration’s immigration policies and its impact on the domestic workforce.
“Basically roughly about 50% of our agricultural workforce in Texas comes from Mexico and some of the Central American countries,” Perryman said. “And so when those folks are not as available in as large a number or they’re here and afraid to come to work, those kinds of things can have some profound effects on the ability to deliver agricultural products.”
Investing
One aspect Perryman also highlighted didn’t focus so much on a particular product, but on something tied closely to the impact tariffs are having on consumer confidence: investing.
Higher prices are contributing to a rise in one particularly concerning word in the economic world.
“There’s probably no word that’s worse for an economy than ‘uncertainty,'” Perryman said. “Because like any other aspect of our lives, when you’re uncertain, you tend to back off and not do anything until you feel better about things.
“And in the economy that means you don’t open that new factory, you don’t build that new building, you don’t hire those new new people. And on a personal side, you don’t buy that new car. You don’t buy that new house. And so it has an impact across the board.”
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