Trump administration announces trade deal which could lower prices of bananas, coffee

The Trump administration announced Thursday that it has reached trade frameworks with Argentina, Ecuador, El Salvador and Guatemala. 

The frameworks are about increasing the ability of U.S. firms to sell industrial and agricultural products in these countries, according to a senior administration official who insisted on anonymity as a condition for briefing reporters on a call about the agreements.

Ultimately, the frameworks could reduce prices on some U.S. grocery items, including coffee and bananas.

Trade deals could lower coffee, banana prices

Dig deeper:

The frameworks touch on an array of subjects, including efforts to reduce nontariff barriers and cut tariffs to 0% on American-made goods as well as commitments to not impose digital services taxes on U.S. companies. There would also be tariff relief on select products from these countries. For example, import licenses in these countries would be eliminated and streamlined, while nations would agree to resolve issues on intellectual property rights.

Under the tariffs previously announced at the end of July by Trump, goods imported from Argentina, El Salvador and Guatemala are taxed at 10%, as the U.S. runs a trade surplus with each of those countries. Products from Ecuador, with which America runs a trade deficit, are taxed at 15%.

The White House also released statements on the frameworks, which have yet to be finalized and are expected to be signed within roughly two weeks.

Treasury's Bessent says 'substantial' relief on coffee, bananas prices soon

What they're saying:

Treasury Secretary Scott Bessent and Trump have each suggested that the tariffs are being relaxed as affordability issues are a key concern for U.S. voters.

Bessent told FOX News on Wednesday that the Trump administration will soon announce actions that will reduce prices on some grocery items.

"You're going to see [a] substantial announcement over the next couple of days in terms of things we don't grow here in the United States. Coffee, coffee being one of them. Bananas, other fruits, things… that will bring the prices down very quickly," Bessent said during an interview on "Fox & Friends."

During the Wednesday interview, Bessent said that the current administration "inherited this affordability mess" and that the country is contending with one of the worst inflation crises in the history of the U.S. 

Trump, in an interview aired on "The Ingraham Angle" on Tuesday, also said the U.S. would lower some tariffs on coffee imports.

Food costs remain high

Big picture view:

The agreements with Argentina, Guatemala, El Salvador and Ecuador come as US President Donald Trump faces scrutiny over his handling of the economy and concerns about affordability.

Food prices first surged when the COVID-19 pandemic disrupted supply chains, and they’ve continued to rise amid global pressures, including the war in Ukraine, new tariffs, and ongoing labor shortages.

A majority of Americans said in a recent poll that grocery costs were a "major" stressor. 

Food costs remained elevated this year, increasing 3.1% in September from the same period a year ago. Bananas and coffee rose 6.9% and 18.9% on an annual basis, respectively.

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The U.S. grows bananas in Hawaii and Florida, but commercial production is limited, and most bananas are imported from countries where labor is cheaper and land costs are lower.

Coffee prices have been rising in recent months, due to tariffs, along with drought and adverse weather conditions affecting production in key coffee-growing regions, including Brazil and Vietnam.

In 2023, about 80% of U.S. unroasted coffee imports came from Latin America, principally from Brazil (35%) and Colombia (27%), the U.S. Department of Agriculture said.

According to the Bureau of Labor Statistics, the average price of a pound of ground roast coffee cost $8.13 in June, up from $7.01 in January and $6.25 a year prior. 

Other new data said the median monthly price of cold brew coffee on restaurant menus increased in October 2025 to $5.53 – up 4.7% from October 2024.