US Eases Tariffs on Latin American Coffee, Bananas, and More
Key Points
- The US announced new trade framework agreements with Argentina, Ecuador, Guatemala, and El Salvador to enhance market access and reduce tariffs on select products.
- Tariffs on coffee, bananas, cocoa, and other foodstuffs from these countries will be lowered or exempted to help reduce consumer prices in the US.
- The agreements maintain general tariffs of 10% on most goods from Argentina, Guatemala, and El Salvador, and 15% on Ecuador, but exempt products not sufficiently produced domestically.
- The deals include commitments to address non-tariff barriers, intellectual property rights, digital trade facilitation, labor protections, and environmental standards.
Overview of New Trade Frameworks with Latin American Countries
On November 13 and 14, 2025, the Trump administration announced framework agreements with four Latin American countries—Argentina, Ecuador, Guatemala, and El Salvador—aimed at expanding market access for US firms and reducing tariffs on certain imports. These frameworks are part of a broader strategy to rewrite global trade rules and promote reciprocal trade relationships that prioritize American economic and national security interests. The agreements are expected to be finalized and signed within approximately two weeks. While general tariffs remain at 10% for Argentina, Guatemala, and El Salvador, and 15% for Ecuador, the frameworks provide tariff relief on select products that the US cannot produce in sufficient quantities, such as coffee, bananas, cocoa, and certain textiles and apparel. These measures are designed to lower prices for American consumers and strengthen supply chains in the Western Hemisphere.
Tariff Relief on Coffee, Bananas, and Cocoa to Address Affordability
A key feature of the new trade frameworks is the reduction or exemption of tariffs on coffee, bananas, and cocoa imported from the four countries. These products have experienced significant price increases in the US, with coffee prices rising approximately 19-20% and bananas about 7% over the past year. The administration highlighted that tariffs on these goods have contributed to higher consumer costs, alongside factors such as severe weather impacting major producers like Brazil, which is not covered by the agreements. The US imports nearly all of its coffee, with Brazil as the largest supplier, followed by Central American countries including Guatemala. The tariff relief is expected to help lower retail prices if savings are passed on by wholesalers and retailers. Treasury Secretary Scott Bessent and President Trump emphasized the importance of these measures in addressing affordability concerns amid ongoing economic scrutiny and inflationary pressures.
Country-Specific Commitments and Trade Provisions
Each framework agreement includes tailored commitments addressing trade barriers and regulatory issues. El Salvador agreed to streamline regulatory approvals for US exports, including acceptance of US vehicle safety and emissions standards and FDA certifications for medical devices and pharmaceuticals. It also committed to removing non-tariff barriers affecting agricultural products. Argentina pledged preferential market access for US goods such as medicines, chemicals, machinery, and agricultural products, and to address intellectual property challenges including patentability and geographical indications. Guatemala committed to facilitating digital trade by refraining from digital services taxes on US companies, ensuring free data transfer, and supporting a WTO moratorium on customs duties for electronic transmissions. It also agreed to strengthen labor rights enforcement and prohibit imports produced by forced labor. Ecuador committed to high environmental standards, improved forest governance, and compliance with WTO fisheries subsidy rules, while reducing tariffs on key agricultural products and eliminating variable tariffs under its Andean Price Band System.
Broader Economic and Strategic Implications
The trade frameworks reinforce the US administration’s focus on fair and balanced trade that supports American workers, industries, and national security. By expanding access to Latin American markets and reducing trade barriers, the agreements aim to boost US exports of industrial and agricultural products, benefiting farmers, ranchers, fishermen, small businesses, and manufacturers. The removal of reciprocal tariffs on certain products, including textiles and apparel under the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA), is expected to strengthen supply chain resilience and promote economic growth in partner countries. These developments come amid political pressures related to inflation and cost of living concerns in the US, with the administration positioning the agreements as a response to voter priorities and a means to counteract unfair trade practices.
Key Takeaways
- The US has reached trade framework agreements with Argentina, Ecuador, Guatemala, and El Salvador to improve market access and reduce tariffs on select imports.
- Tariff relief on coffee, bananas, and cocoa aims to lower consumer prices amid inflation and supply challenges.
- The agreements include commitments to address non-tariff barriers, intellectual property, digital trade, labor rights, and environmental protections.
- These trade deals support US economic and national security goals by enhancing reciprocal trade and strengthening supply chains in the Western Hemisphere.
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