There’s a lively debate among free market economists about whether tariffs contribute to inflation. We think they can at the margin by raising production costs.

But what is indisputable is that tariffs on certain products raise their costs and thus prices. Coffee prices rose sharply after the Trump tariffs of up to 40% on Brazilian and Colombian coffee beans. And then, suddenly, Trump lowered the tariffs. Here has been the immediate response as reported by Reuters:

“Global coffee prices plunged on Friday after U.S. President Donald Trump removed 40% tariffs on imports of Brazilian agricultural products including coffee and cocoa in the face of growing angst from American consumers about high food costs.”

This chart shows the before and after effects of the tariffs being imposed and then repealed: