Trump Readies Tariff Cuts, Trade Deals in Affordability Push
Donald Trump, left, and Javier Milei
(Bloomberg) — US President Donald Trump is readying substantial tariff cuts designed to address high food prices and a series of new trade deals — including framework agreements with Argentina, Guatemala, El Salvador and Ecuador — as he seeks to address voter concerns over the cost of goods.
The push comes after electoral victories for Democrats last week across a number of key state and local races where candidates stressed affordability concerns. Trade deals with Latin American countries unveiled Thursday will see the US reduce tariffs and barriers on common grocery items like beef, bananas, and coffee beans in a push to lower grocery bills that have for years frustrated Americans.
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Separately, Trump and other senior administration officials have previewed broader tariff exemptions that could cut levies on popular food products across the board. In interviews earlier this week on Fox News, Trump pledged to “lower some tariffs” on coffee while Treasury Secretary Scott Bessent suggested fruit imports would receive a break.
“One of the things that people have been talking about, just the last few days, is, you know, thinking about changing tariffs for foodstuffs,” National Economic Council Director Kevin Hassett said Wednesday in an interview with Bloomberg host and Carlyle Group co-founder and co-Chairman David Rubenstein at an Economic Club of Washington event.
The New York Times reported Thursday that Trump was preparing changes to reciprocal tariffs expected to include carve-outs for beef and citrus products, and extend beyond a previous executive order in which the president tasked administration officials with identifying foodstuffs that were not grown in the US for exemptions.
“The Trump administration is committed to pursuing a nimble, nuanced, and multi-faceted strategy on trade and tariffs,” White House spokesman Kush Desai said in a statement.
Desai said possible changes would flow from both products identified by the president’s executive orders, and “trade deals being inked with some of our biggest allies in the Western hemisphere.”
Donald Trump, left, and Javier MileiPhotographer: Stefani Reynolds/Bloomberg
The most significant of the deals announced Thursday was likely an agreement with Argentina, offering the latest boost from Washington for President Javier Milei as he attempts to open up one of the world’s most protectionist economies.
“The countries will open their markets to each other on key products,” according to a White House statement that said Argentina would provide “preferential market access for US goods exports” including certain medicines, chemicals, machinery, information technology products and medical devices.
The deals announced with Guatemala, El Salvador and Ecuador focused on reducing tariffs on key exports like bananas and coffee beans that are largely not produced in the US.
The framework agreements will be completed in around two weeks and are expected to exempt specific products rather than reduce existing reciprocal tariffs, according to a senior Trump administration official who spoke on condition of anonymity. The White House expects retailers and wholesalers to pass along any benefits to American consumers, the official added.
The administration official also indicated progress in an ongoing trade negotiation with Switzerland that could reduce tariffs on goods such as watches and chocolate.
The broad effort could help Trump as he attempts to reverse perceptions that he’s neglected addressing high costs that continue to anger Americans. As he signed legislation reopening the federal government on Wednesday, Trump said he would continue his work to “lower the cost of living, restore public safety, grow our economy, and make America affordable again for all Americans.”
Still, by removing tariffs Trump himself imposed earlier this year, he is simply resetting import taxes back to where they were before he took office. The administration claims that lower trade barriers in Latin American countries will boost US businesses, though the nations who secured framework agreements on Thursday have much smaller trade flows with Washington than many other economies do.
The Argentina deal provides a boost for Milei, an ideological ally, who had set a goal this year of reaching a trade agreement with the US.
The framework for the Argentina agreement comes after the Trump administration’s sweeping rescue package last month amid a market selloff. The US rushed to provide $20 billion in financing and directly purchased pesos in a bid to stem a currency selloff and help Milei’s party pull off a major comeback in midterm elections.
At the same time, opening up Argentina’s fragile economy will likely be met with some resistance as many domestic industries are not competitive at a global level due to high costs and tax burdens.
For its part, the US will also remove “reciprocal tariffs on certain unavailable natural resources and non-patented articles for use in pharmaceutical applications,” according to the White House.
Beef Trade
Argentina and the US have also “committed to improved, reciprocal, bilateral market access conditions for trade in beef.” The moves to ease trade in cattle come as Trump looks to provide relief to American consumers from beef prices that have surged in recent years.
Yet Trump’s efforts on beef have drawn fierce criticism from ranchers — a sector that has largely backed the president. After he previously announced plans to import more beef from Argentina, the National Cattlemen’s Beef Association said any increased imports would undercut US producers. The administration has worked to placate ranchers with a program to boost domestic beef production that includes more grazing on federal lands.
The US shipped $2.6 million worth of beef and pork products to Argentina in 2024, according to US Department of Agriculture data. Argentina’s government had blocked imports of US poultry products due to concerns with the avian influenza, according to the International Trade Administration. The disease has continued to affect US farms since 2022 and decimated bird flocks earlier this year.
While the full size and scope of the looming agreement isn’t finalized, Argentina can’t obtain a very broad agreement with the US because it is part of the South American trade bloc Mercosur, which prohibits members from negotiating large agreements outside the bloc. However, Mercosur countries earlier this year granted each member the ability to choose up to 50 products that could be negotiated outside the bloc and be free of its common external tariffs.
–With assistance from Derek Wallbank, Meghashyam Mali, Jeff Sutherland, Hadriana Lowenkron and Josh Wingrove.
(A previous version of this story corrected the timeline for Argentina’s financial bailout.)
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