With grocery prices already more than 25% higher than five years ago, tariffs could spur increased costs for families already on a tight budget. Nancy Chen has more.

Washington

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

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Shoppers in the United States are feeling the pinch as grocery prices continue to rise, exacerbated by the U.S. imposing a 10% tariff on Chinese goods. In response, China has levied tariffs of 10% to 15% on American products such as coal and gas. These developments add to the strain that American families are already facing due to inflation and supply chain disruptions.

Consumers like Melissa Robinson, who shop in Clifton, New Jersey, have felt the brunt of these price increases, with weekly grocery bills reaching $250. Cost spikes have been attributed to several factors, including supply chain issues, increased labor costs, and bird flu outbreaks. Egg prices, for example, have seen a 65% rise over the past year and are predicted to surge by another 20%.

The potential impact of tariffs, especially on produce, poses further challenges for businesses like that of Stu Leonard Jr., a family-owned grocery chain. Produce is particularly susceptible, given that nearly 60% of fresh fruits and 35% of fresh vegetables are imported. Distributors like Anthony Serafino, who imports goods from Latin America, warn of the inevitable passing on of these increased costs to consumers, further burdening families who may already be struggling financially.

Despite the relief of a temporary pause on tariffs for Mexican and Canadian goods, items from China now face additional duties. Popular imports such as avocados could become significantly more expensive, as 90% of the U.S. supply is imported. The combination of persistently high prices and tariffs creates a unique challenge for the grocery industry, with little relief in sight. Economists suggest that wages would need to rise at a faster rate than prices to alleviate this burden, a solution that might take years to materialize.



Shoppers buy 'bare minimum' at grocery stores as tariffs loom

The United States hit China today with a 10% tariff on all goods it exports to the United States. And China responded with tariffs of 10 to 15% on a narrow range of American products including coal and gas. Nancy Chen in Clifton, New Jersey, begins our coverage of the rising price of just about everything. Nancy. Maurice, it has been a persistent problem. Even with inflation slowing, it is nearly impossible to get the same amount of food as you could just a few years ago with that same budget. And American families are making sacrifices. Each trip to the store is getting harder for Melissa Robinson. I can't afford to, you know, eat a healthy diet for my kids and for myself. I just buy the minimum, the bare minimum. These days you're buying the bare minimum. Yeah. How hard is it to put food on the table for your family? I spend at least $250 a week. We found grocery prices are more than 25% higher than five years ago. That's in part because of supply chain issues, increased labor costs and bird flu outbreaks. Egg prices alone have gone up on average 65% in the past year and are expected to increase 20% more this year, according to the USDA. Customers don't want any more price increases. Yes. They're up to here. Now the threat of tariffs is adding yet another challenge for grocer Stu Leonard Jr., the CEO of his 100-year-old family business. While tariffs on Mexican and Canadian goods are on a 30-day pause, goods from China are now subject to a 10% tariff. In general, where have you seen the biggest price increases? What we're just trying to do is keep our prices as tight as we can, not lower quality a bit. Produce is especially vulnerable to tariffs. In 2023, nearly 60% of the fresh fruit and 35% of the fresh vegetables on store shelves were imported. How do you even operate when there is so much volatility? I mean, it's very difficult, but we all have to eat. Are you stockpiling things? How are you planning ahead? You can't really stockpile, right, because they're perishables. I always say we're not selling wine. It doesn't get better with age. Anthony Serafino imports and distributes produce from Latin America. Goods are more expensive, and they will be passed along to the consumer. So we're just preparing our clientele to make them aware. Any price increase is a challenge for families already on a tight budget. We just have to do what we can do, but it's pretty much the bare minimum. We asked both Serafino and Leonard about what would be hit hardest if there are tariffs on Mexican goods. Both pointed to avocados because we import 90% of this country's supply. Nancy, let's put tariffs aside for just a second. When people talk about high prices, they talk about supply chains and labor. What does that mean in specific terms? When it comes to supply chains, it's like what you remember from the pandemic. When there are shrinking—shipping bottlenecks shrink supplies, which makes what does get through more expensive. Also, when there aren't enough workers, it makes what—the labor that does get through more expensive. Also important to note that when prices do go up, companies are often reluctant to bring them back down, even if circumstances change. Is there any hope, Nancy, for prices to ever actually come down? Unfortunately, not really. While you may see specific individual items go down in price, grocery prices as a whole are here to stay. The economists we spoke with say that the real solution here is waiting for wage increases to outpace price increases, but that could take years.

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