White House opens door to lower tariffs on some food, pharma products

"Some or all of the products on the list "may" have tariffs reduced from high reciprocal rates to lower levels, the White House said, if countries make deals that help "mitigate the national emergency relating to the trade deficit" and address other trade concerns. The list is broken into four broad categories: Some aircraft parts; Generic pharmaceuticals and their ingredients; Natural resources that can't be obtained domestically; Food and agricultural products where there isn't sufficient domestic supply to meet demand."

"Between the lines: For consumers, the food list is perhaps the most notable, as it offers the prospect of relief on fruits (bananas, papayas, kiwi), spices (cinnamon, cardamom, mace), sweets (cocoa, vanilla) and beverages (tea, coffee), among others. It comes as tariff-driven inflation is already starting to show up in the food supply chain. Wholesale vegetable prices rose almost 39% in July, the largest increase ever recorded in the summer months."

"Zoom in: The pharmaceuticals list is even longer, offering potential exemptions on amino acids, vitamins and other essentials. The natural resources list includes a wide variety of wood products (which could help furniture companies facing the prospect of new tariffs), as well as some gems. Reality check: As the White House memo makes clear, these products will still be tariffed - just at potentially lower rates, on a case-by-case basis, depending on what deals their exporters make."

The administration released a memo creating the Potential Tariff Adjustment for Aligned Partners (PTAAP) to permit lower tariffs on select products. Some listed goods may have tariffs cut from high reciprocal rates if exporting countries make deals to mitigate the trade deficit and other concerns. The list includes aircraft parts; generic pharmaceuticals and ingredients; natural resources not obtainable domestically; and food and agricultural products lacking sufficient domestic supply. Foods named include bananas, papayas, kiwi, spices, cocoa, vanilla, tea and coffee. Tariff-driven inflation is appearing in the food supply chain, with wholesale vegetable prices up almost 39% in July and coffee futures rising. Exemptions would still be tariffed but potentially at lower, case-by-case rates.

Read at Axios