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President Donald Trump ran for reelection on a promise to lower grocery prices “on Day One.” Now, his administration seems to be acknowledging six months of aggressive, capricious trade policy has done the opposite.

We’ll talk about new tariff carve-outs, and how they might impact your grocery bill, in today’s newsletter. Plus, the latest on the search for a new Fed chief,the data center economy and falling international student enrollment. Have a great weekend! —  Tony Wagner, newsletter editor
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The price of your cup of joe is unlikely to go down
Coffee costs have been going up due to extreme weather and Brazil, which exports a third of America’s coffee beans, isn’t on the tariff exemption list. Marketplace’s Kristin Schwab reports.

Another day, another potential tariff change. The latest from the White House: to address Americans’ rising grocery bills, President Trump wants to carve out tariff exemptions.

There aren’t many details yet, but officials have noted that exemptions might include foods like coffee and bananas from four countries: Ecuador, Argentina, El Salvador and Guatemala. Will these meaningfully lower costs for American consumers?

Noah Namowicz, COO of Cafe Imports in Minneapolis, has a lot of tariffs to keep tabs on.

“Each country has its own unique rate,” Namowicz said.

From Indonesia to Ethiopia to Peru, the company imports from something like 30 different countries, including some on the exemption list.

“Open our computers every day and just figure out how we bring nice coffees to market,” Namowicz said.

He said any tariff relief helps. But it’s likely not going to have a huge impact on prices. The U.S. imports about a third of its beans from Brazil, a country not on the exemption list. The tax rate for imports from Brazil is 50%. Meanwhile, coffee costs have been rising because of extreme weather.

“So yeah, there’d need to be a couple other things that would probably have to happen for the coffee market to actually come down,” Namowicz said.

Ricky Volpe, a professor of agribusiness at Cal Poly San Luis Obispo, said a tariff exemption is welcome news because it could help slow inflation. But, he said, “It’s not likely to bring food prices down.”

There are so many other factors that influence the price of food, like cost of labor, transportation and warehousing. Plus, there are other tariffs.

READ MORE


 
News you should know

Let’s do the numbers

  • After one of its worst days since April, Wall Street ended the day mixed. The S&P 500 dipped 0.1% and the Dow lost 0.7%, but the Nasdaq managed to inch up 0.1% after a  volatile morning thanks to swings in Nvidia shares. 

  • The latest survey data shows some small businesses are at their gloomiest since tariffs hit in April. Some are building a “war chest” to ease price anxiety.

The Trump administration

  • Also on the trade tip: The U.S and Switzerland reached a deal lowering tariffs to 15%. The agreement comes with a promised $200 billion investment in the U.S. 

  • The White House’s search for a new Federal Reserve chair seems to be coalescing around limiting the central bank’s balance sheet — and influence on the bond market.

  • Atlanta Fed President Raphael Bostic announced he’ll retire next year. He’s been on “Marketplace” a lot, and in our last conversation he preached cautious monetary policy.

  • Amid sky-high tariffs, the Trump family business announced an American-made smartphone. Customers put down a $100 deposit, but no phone has materialized yet.

The data center economy

  • Local races show artificial intelligence data centers are dividing Americans, who need jobs but are concerned about energy use. 

  • The biggest data centers draw the power of a small city, so greener facilities face challenges generating enough electricity.

  • In Santa Clara, California, two data centers are sitting dark because local utilities can’t yet power them.

  • In Denver, data center projects are hitting underserved communities with more light and air pollution. Experts warn of “digital smog” around the country.


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QUOTE OF THE DAY
"Suppose you're running the pizza joint next to the university and a bunch of students disappear, you're going to have to lay people off or close real quick."
—  Dick Startz, economist at the University of California, Santa Barbara

The Trump administration has made it harder for international students to study in the U.S., and early data indicates those moves are already having an impact. Smaller, religious and specialized schools will be disproportionally affected, and some have already reported international enrollment is down by as much as 60%. If that trend continues, it will be a big deal for colleges, the people who work at them, and for local economies.


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Final note
Requesting an early check-out
Once valued at over a billion, the lodging company Sonder was supposed to combine the best of hotels and Airbnb. But the company’s finances collapsed this week, and some customers found themselves thrown out of their rentals mid-trip. That’s not usually what people mean when they say, “I need a vacation from my vacation.”
 
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