US cuts import tariffs on key agri, processed foods

President Donald Trump said he had decided to modify the scope of products subject to reciprocal tariffs based on “additional information and recommendations”.

The US has exempted a wide range of agricultural and processed-food items from reciprocal tariffs, which will also apply to India, effectively reducing import duties from 50% to zero on products including coffee, tea, fruits, nuts, spices and essential oils, people with direct knowledge of the matter said, adding that these represented a small portion of the Indian exports to US that may hold potential.

Donald Trump (AP)

The Trump Administration on November 14 released a revised list—Annexure II—of goods exempted from country-specific reciprocal tariffs that were imposed in August this year. The exemptions became effective from November 13.

In an executive order issued on November 14, President Donald Trump said he had decided to modify the scope of products subject to reciprocal tariffs based on “additional information and recommendations” from officials. “Specifically, I have determined that certain agricultural products shall not be subject to the reciprocal tariff imposed under Executive 14257, as amended,” the order said.

The exemptions cover 254 new products, including 229 agricultural items, representing over $1 billion of India’s exports to the US out of total agricultural exports of $5.7 billion in 2024, one of the people cited above said.In all, India exported close to $86.50 billion in goods to the US, comprising mostly electronics equipment, pharma products and precious stones and metals.

“Many of these additions align with categories in which India has consistently demonstrated strong export performance, with global exports of approximately $11 billion,” the person added.

The US imports 48 types of fruits and nuts from India, including coconuts, guavas, mangoes, cashew nuts, bananas, areca nuts and pineapples. It also imports 50 processed food products such as coffee and tea extracts, cocoa preparations, juices, fruit pulps, mango-based products and vegetable waxes.

India exports all spices except Thyme to the US, worth $358.66 million, and all 12 types of tea and coffee products worth over $82.5 million. Essential oils, identified as a new product category, now have zero-duty access with bright prospects in the American market.

“Although, exports do not appear big in terms of value, it has tremendous significance for labour-intensive Indian agriculture sector,” a second person said. The reductions will provide a level playing field for India’s agricultural exports, which were disadvantaged due to higher tariffs, the person added.

India is well-placed to gain from this development due to its existing supplier credibility, established distribution networks and strong diaspora-driven demand factors that provide a competitive edge in the US market.

“The development will incentivise Indian farmers for value-added exports, particularly in the categories of coffee extracts, cocoa-based preparations, essential oils, and specialty food ingredients,” the person said.

The announcement comes amid mounting pressure on Trump’s administration to combat high consumer prices.

The decision represents a significant retreat from his signature tariff policy, coming after voters in off-year elections this month cited economic concerns as their top issue, resulting in big wins for Democrats in Virginia, New Jersey and other key races.

“We just did a little bit of a rollback on some foods like coffee,” Trump said aboard Air Force One as he flew to Florida hours after the tariff announcement. When pressed on whether his tariffs had helped increase consumer prices, Trump acknowledged, “I say they may, in some cases” have that effect. “But to a large extent they’ve been borne by other countries,” he added.

Record-high beef prices have been a particular concern, and Trump had said he intended to take action to lower them. Trump’s tariffs on Brazil, a major beef exporter, had been a factor.