President Trump insists his border taxes aren’t raising prices, but Treasury Secretary Scott Bessent more or less conceded otherwise on Wednesday when he floated exemptions for coffee and bananas. Is this the beginning of political wisdom?
Perhaps it’s sinking in at the White House that Americans aren’t happy about the economy and high prices. The Administration in recent days has been stressing moves to improve “affordability.” Many of the Administration’s actions such as investigating meat packers are counterproductive. But tariff relief would be welcome.
Mr. Bessent teased tariff exemptions in a Fox News interview this week: “You’re going to see some substantial announcements over the next couple of days in terms of things we don’t grow here in the United States, coffee being one of them, bananas, other fruits, things like that.” White House economic adviser Kevin Hassett echoed Mr. Bessent.
It made no sense even on the Administration’s protectionist logic to tariff products the U.S. doesn’t produce. More than 99% of coffee sold in the U.S. is imported. So are the vast majority of bananas, mostly from Colombia and Central America.
The tariff costs are hitting home, literally. Prices have increased 6.9% for bananas and 18.9% for coffee over the past 12 months, according to government figures. Who wouldn’t be cranky about paying $6 for a dark roast cup of joe? Trump officials say exporters pay the tariffs, but consumers see the opposite each day at Starbucks.
Americans who own stocks are feeling good about their finances, but everyone else not so much.
This is why Americans disapprove of Mr. Trump’s handling of the economy by a 14-point margin, according to the Real Clear Politics average. They also rate him poorly on trade (-14 points net disapprove) and inflation (-17 points) in the latest Harris Insights & Analytics survey.
This is especially notable since Americans elected Mr. Trump in large part because they hoped he would deliver broad economic prosperity as he did in his first term. He won 81% of voters who rated the economy as the most important issue, and he started his Presidency with positive marks on the economy and consumer confidence riding high.
Views of his handling of the economy started to slide in February when he launched his tariff barrage on Canada and Mexico. They have continued on a downward slope. Mr. Trump said this week that the “polls are fake. We have the greatest economy we’ve ever had.” That’s what the Biden team said as inflation raged.
Businesses have been passing on the border taxes to consumers to varying degrees. Some are also slowing hiring and putting investments on hold because of tariff uncertainty. Consumer sentiment on the University of Michigan’s survey last week fell to a near record low — near the same level when inflation peaked at 9.1% in June 2022.
The Administration’s pollyannas keep saying that the sun will come out tomorrow. Just wait — you’ll see. “American people are going to start feeling better” by the first half of next year, Mr. Bessent said. We hope so.
Mr. Bessent also blamed the Biden crowd for the “affordability mess,” which is true as far it goes. But Mr. Trump’s tariffs are making daily life less affordable now. Americans want a tariff reprieve for more than coffee and bananas.
