Expect The Price Of Coffee (And Flowers) To Skyrocket Now
In 2023, the total value of U.S. imports from Colombia was reported to be around $17 billion. The U.S. is Colombia’s largest trading partner. The top products imported are:
Crude oil (over $6 billion)
Coffee (almost $2 billion)
Flowers ($1.64 billion)
Gold
Bananas
Fruits, vegetables, cocoa beans, oilseeds
Far more valuable are cocaine, marijuana and synthetic drugs (primarily fentanyl and meth), as much as $40 billion annually, more than double the legal imports. Trump’s peremptory tariffs against Colombia won’t touch the illegal drugs but… coffee drinkers and flower-giving lotharios beware. Yesterday Genevieve Glatsky and Simon Romero reported that Trump flipped out when Colombia refused to accept U.S. military planes carrying deportees. His moronic statement says he will impose a 25% tariff immediately and that will rise to 50% in a week. (Colombia, by the way, has been a steadfast ally.)
I wonder if Trump’s over the top racism will put Starbucks, Peet’s and Caribou out of business. “The Trump administration,” they wrote, “will also ‘fully impose’ banking and financial sanctions against Colombia, and will apply a travel ban and revoke visas of Colombian government officials, the president said. The move reflects how Trump is making an example out of Colombia as countries around the world are grappling with how to prepare for the mass deportations of unauthorized immigrants that he has threatened… Colombia’s president, Gustavo Petro said that Colombia had already turned away military planes carrying Colombian deportees. While other countries in Latin America have raised concerns about Trump’s sweeping deportation plans, Colombia appears to be among the first to explicitly refuse to cooperate.”
Clearly, inflation and bringing down the prices of groceries isn’t a Trump priority, although it sure was during the campaign… and it sure was for many Trump voters: “Trump voters were more motivated by economic issues than Harris voters. About half of Trump voters said higher prices were the largest factor in their decision, according to AP VoteCast… Trump put the cost of living front and center in his pitch, claiming in his nomination acceptance speech that ‘inflation will vanish completely’ under his watch.”
Maybe he meant that talk of inflation is what would vanish— and it has. A September 2024 survey by Pew found that 81% of registered voters considered the economy to be a very important factor in their voting decision.
And a Gallup poll right before the election reported that 52% of registered voters rated the economy as an “extremely important” issue, with an additional 38% considering it “very important.”
“Two months ago,” wrote Chris Megerian and Josh Boak, “in his first network television interview after the election, Trump said he owed his victory to Americans’ anger over immigration and inflation, specifically the rising cost of groceries. ‘When you buy apples, when you buy bacon, when you buy eggs, they would double and triple the price over a short period of time,’ he told Meet the Press. ‘And I won an election based on that. We’re going to bring those prices way down.’ But in Trump’s first week back in the White House, there was little in his initial blitz of executive orders that directly tackled those prices, besides directing federal agencies to start ‘pursuing appropriate actions.’ He is taking steps to lower energy costs, something that Trump hopes will have ripple effects throughout the economy. Otherwise, his focus has been clamping down on immigration, which he described as his ‘No. 1 issue’ shortly after taking the oath of office.”
I spoke with Ted Lieu (D-CA) yesterday and he told me what a lot of congressional Democrats are thinking, namely that “Once again, President Trump is showing his priorities are out of touch with the real struggles of working Americans. While he talks about addressing inflation and the rising cost of everyday essentials like food, his actions fall far short of delivering meaningful relief. Instead, his focus remains on divisive immigration policies, which do nothing to tackle the root causes of economic hardship. If Trump truly cared about reducing prices for families, he would focus on policies that bring down costs and create sustainable economic opportunities, not just fan the flames of fear and division. Americans deserve leadership that addresses their needs, not just more empty promises.”
Trump is banking on voters giving him a pass and continuing to blame Biden for high prices. The Republican’s comments reflect the reality that presidents have almost no levers to reduce inflation quickly without causing collateral damage to other parts of the economy.
There is more that Trump can do on energy. He is pushing to reduce regulations and increase the amount of land available for drilling. He is trying to persuade domestic and foreign oil producers to potentially sacrifice their own profits by pumping more.
During a rally Saturday in Las Vegas, Trump went after his Democratic predecessor for allowing prices to rise under his watch, and promised to take care of the problem quickly.
“When I think of Biden, I think of incompetence and inflation,” Trump said.
Inflation peaked at a 9.1% annual rate in June 2022 during worldwide supply chain problems after the economic shock of the coronavirus pandemic. Overall consumer prices have fallen since then, but have ticked up in recent months, from 2.4% in September to 2.9% in December, the latest figures available. Economists have warned that Trump’s plans for tariffs and tax cuts could create new inflationary pressures and keep interest rates elevated.
Vice President JD Vance, in an interview with CBS’ Face the Nation airing Sunday, defended the White House’s work so far.
“Prices are going to come down, but it’s going to take a little bit of time, right?” he said. He added, “Rome wasn’t built in a day.”
Trump’s relative shift away from addressing costs could create an opening for Democrats to say he is not helping working-class voters, hoping that argument could offer the party a path back to power in Washington.
Sen. Chris Murphy (D-CT) said Trump preferred to distract people from inflation with talk of adding Greenland to the United States or seizing the Panama Canal.
“It’s catnip and it causes everybody to stop paying attention to their actual economic agenda, which has nothing to do with lowering costs and everything to do with rigging the economy to help the Mar-a-Lago crowd,” he said.
During an interview on Fox News this past week, host Sean Hannity struggled to get Trump to focus on the economy.
“Let me get to the economy,” Hannity said at one point. “I’m running out of time.”
“The economy is going to do great,” Trump insisted.
When Trump did talk about inflation in the interview, he noted how low it was during his first term and insisted prices would not have jumped up if he had president after the 2020 election, even though higher inflation was a global trend coming out of the pandemic.
It is not clear how Trump would persuade oil companies and foreign countries to quickly increase production, possibly costing them profits.
…But there is a risk that some of Trump’s plans taken as a whole could raise— not reduce— prices. Deporting migrants who are in the United States illegally could deprive companies of lower wage workers. The cost of tariffs, which are taxes placed on foreign imports, could be passed on to consumers.
Trump said that his strategy also might ultimately involve publicly pressuring the Federal Reserve to cut interest rates, saying in Davos that he would “demand” lower rates from central banks. The Fed sees its political independence as key for making tough choices to stabilize prices. Biden saw the independence as worth protecting, whereas Trump sees it as problematic.
The Fed raised its benchmark rates starting in 2022 to make it more expensive to borrow and succeeded enough in reducing inflationary pressures that it could trim rates late last year. Trump believes that greater oil production will put him in a position to tell the Fed what to do.
Asked in the Oval Office if he expects the Fed to listen to him, Trump simply said, “Yeah.”
On Sunday, MAGA Mike tweeted that “Congress is fully prepared to pass sanctions and other measures against those that do not fully cooperate or follow through on requirements to accept their citizens who are illegally in the United States.” Ohio Republican Senator Bernie Moreno, a wealthy worm who was born in Colombia, posted this to Twitter yesterday:
Meanwhile, Colombian President Gustavo Petro, a socialist, punched back by ordering retaliatory tariffs on U.S. goods coming into his country. This is how trade wars get out of control.
AND THEN… Trump “fixed it” after breaking it. Leaving nothing but ill-will in his wake. The whole mess could have played out diplomatically, instead of in the headlines, but that isn’t how Trump seems to want to do things, at least not with smaller, weaker countrries he can push around and humiliate. The bully ethos; you'd expect more from Marco Rubio? Nah,not while he's working for Señor T.
Looking north instead of south, my hope is that if Trump pushes Canada too hard, it raises the fee for U.S. airlines to use Canadian airspace up to an economically punishing level - say $10,000 per flight. Of course, the U.S. could reciprocate, but if you look at aviation routes you can see that the U.S. needs Canada a lot more than vice versa.