“This deal will reduce prices for Americans while giving space for our Great American Beef Herd to grow again,” Trump wrote in a Truth Social post on Friday.

“We have a commitment that this beef will be sold at 25 percent below current market prices.” 

The president’s post did not name any companies that have made these commitments, nor did he mention who he had reached a deal with regarding import waivers, or if any importers would sell the meat at “below current market prices.” 

“President Trump will formally sign an executive order to this effect within the next two weeks,” a spokesperson from the White House told Fortune in a statement. The statement added this will only apply to “lean beef trimmings for ground beef production.”

The statement went on to say the president has already secured deals with foreign exporters to provide the 25% discount.

“Beef prices are elevated because of supply shortages that began under the Biden administration,” the spokesperson said. “The American cattle herd size is at a multi-decade low, while domestic demand for beef continues to be high.”

The news wasn’t well received by domestic cattle groups. The National Cattleman’s Beef Association, in response to Fortune’s request for comment, took issue with the White House’s approach to “flood” the market with subsidized foreign products.

“While America’s cattle producers share the goal of keeping groceries affordable for consumers, flooding the market with government-subsidized, below-market beef is not the way to rebuild the American cattle herd,” read a statement from NCBA CEO Colin Woodall. “Today’s announcement and other market interventions throw cold water on the prospect of herd expansion and sacrifices long-term stability for short term messaging.”

High prices for meat

The move amounts to a notable retreat from the protectionist logic behind Trump’s tariff motives. The president has spent years arguing tariffs would protect American producers, raise revenue and ultimately benefit US consumers. Now, as beef prices remain stubbornly high, his administration is turning to a cheaper foreign supply to put downward pressure on prices.

The deal comes as ground beef prices approach $7 a pound. The average price reached $6.89 per pound in July, up about 10% from a year earlier and 57% from five years ago, according to the Federal Reserve Bank of St. Louis. The U.S. cattle herd, meanwhile, is near its lowest level since the 1950s.

https://www.datawrapper.de/_/wo6dF

Steve Hanke, an economist at Johns Hopkins University who also trades cattle, told Fortune the beef episode shows the problem with using tariffs when domestic supply is already constrained.

“The big theme is that Trump has finally learned with hamburger that tariffs are simply taxes on American consumers and he’s learned it at the grocery store the hard way,” he said.

The beef shortage, Hanke said, is not primarily a consequence of one short-term disruption. The underlying problem is that the American cattle herd has been shrinking for years. The cattle shortage has been worsened by drought and the resulting pressure on pasture and feed costs. Ranchers have reduced herds, while strong demand for beef has kept pressure on the dwindling supply.

That makes Trump’s tariff policy particularly awkward for beef. The US needs more cattle and more beef, but the tariffs make imported beef more expensive. If domestic producers cannot immediately make up the difference, consumers absorb the higher prices.

“If you have a fundamental thing where the supply is shrinking and the market’s tighter and tighter, do you put a tariff on imports?” Hanke said. “Brazil is one of the epicenters of the goddamn thing.”

Brazil is particularly relevant because it is one of the world’s major beef producers and a significant source of beef imports for the US. Yet the Trump administration has imposed a 25% tariff on certain Brazilian goods following a US Trade Representative investigation into Brazilian trade practices. The investigation found Brazilian policies unreasonable or discriminatory toward US commerce.

But Hanke argues the policy is working against the administration’s own objective of bringing down food prices.

“Tariffs are not a cure-all, they’re always a tax on American consumers,” he said, “that’s the bottom line, it’s just basic economics.”