Higher tariffs are a tax on consumers in importing countries. American consumers are experiencing this reality through relatively higher food prices in the country since the Liberation Day tariffs were introduced earlier this year.
Confronted by this reality, the US government has taken steps to modify its reciprocal tariffs and exempt certain food products. This is likely to ease pressure on consumers over time and benefit the exporting countries. South Africa is one of the countries that will benefit from the easing of the US government’s policy step.
Exempted products
The exempted products include coffee and tea, fruit juices, cocoa and spices, as well as avocados, bananas, coconuts, guavas, limes, oranges, mangoes, plantains, pineapples, various peppers and tomatoes, beef and additional fertilisers.
The US government’s decision to exempt some food products from these higher Liberation Day tariffs is a recognition of the policy mistake and the unintended consequences of higher prices on households.
South Africa is an exporter of various agricultural products to the US, including citrus, table grapes, macadamia nuts, wine, ostrich products and ice cream.
It appears that oranges, macadamia nuts and fruit juices will benefit from the exemption. This will leave other agricultural industries, such as those producing table grapes, wine, ostrich products and ice cream, still facing higher tariffs.
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