WMT, KR, COST: U.S. Tariffs Expected to Push Food Prices Higher

U.S. President Donald Trump’s tariffs could lead to higher prices on certain foods, according to industry experts.

Tariffs are essentially a tax on foreign nations that are paid by domestic companies importing goods or services. As such, U.S. consumers are expected to pay higher prices for imported products that have tariffs applied to them, including foreign food and beverages.

A Tax Foundation analysis found that Americans can expect to pay higher prices for items ranging from Brazilian coffee and French wine to bananas grown in India. Many of the imported foods facing import duties have limited U.S. production and can’t meet American demand from domestic sources.

A rise in food prices could negatively impact sales of major grocery retailers such as Walmart (WMT), Kroger (KR), and Costco Wholesale (COST).

New Duties

In 2024, America’s food imports totaled $221 billion. Most of these products already face tariffs ranging from 10% to 30%. However, new duties in excess of 30% for some countries are expected to hit consumers in their wallets, says the Tax Foundation.

The top imported foods into the U.S. by volume that could face tariffs are alcohol, baked goods, coffee, and fish. American grocery prices were 2.4% higher in June than a year earlier, according to the latest inflation data. However, most economists agree that the full impact of tariffs is not yet reflected in consumer prices.

A separate analysis by The Budget Lab at Yale University estimated that tariff price increases will raise food costs by 3.4% in the short-run and 2.9% in the long-run.

Is WMT Stock a Buy?

The stock of Walmart, which is the largest U.S. grocery retailer, has a consensus Strong Buy rating among 28 Wall Street analysts. That rating is based on 28 Buy recommendations. The average WMT price target of $111.33 implies 13.31% upside from current levels.

Read more analyst ratings on WMT stock