Trump’s Deranged Plan to Lower Food Prices By Raising Them. By The Atlantic - Politics by Scott Lincicome

 / Sep 20, 2024 at 9:00 PM//keep unread//hide

At a campaign event on Tuesday night, Donald Trump vowed to lower the price of groceries by … taxing them? Responding to a question about food costs, Trump told the Michigan audience that his plan would entail both energy deregulation and protectionist restrictions on food imports, which, he claims, would help American farmers.

Leaving aside that U.S. grocery inflation has been dead in its tracks since last year—prices are up just about 1 percent compared with summer 2023—Trump is in some sense correct: Reducing fuel costs could reduce food prices a bit if the energy-intensive American agriculture industry passed on the savings to U.S. consumers. And yes, restricting imports of certain farm goods, presumably via Trump’s favorite tool, tariffs, could boost the incomes of American farmers by shielding them from foreign competition.

As a plan to lower grocery prices, however, Trump’s protectionism is ludicrous. If implemented, it could even return us to the bad old days of American grocery scarcity.

Imports are essential to the U.S. grocery market today, and to its steadily increasing abundance. In 1980, the typical supermarket carried only about 100 different produce items. Selection was limited by North American growing seasons—good luck finding a strawberry in winter—and few Americans had even heard of, let alone tasted, products such as lychee or jackfruit. Today, the variety of produce items has more than doubled, and a stroll through those same aisles reveals an incredible variety. This is thanks to global trade. According to the Food and Drug Administration, 55 percent of fresh fruits and 32 percent of fresh vegetables in the United States are sourced from abroad.

Much of this boom in international food trade is owed to agreements struck in the 1990s that allowed more products to enter the United States duty-free. The North American Free Trade Agreement, which took effect in 1994, improved Americans’ access to warm-weather produce from Mexico and specialty foods from Canada. Since the late ’90s, fresh-vegetable imports—mainly from these two countries—have nearly tripled. A standout example is avocados, about 90 percent of which are imported today, almost all from Mexico. Our southern neighbor also supplied more than half of all U.S. berry imports in 2023.

Globally, the 1995 World Trade Organization agreements, especially the Agreement on Agriculture, significantly reduced worldwide food-related trade barriers. Since then, agricultural trade has more than doubled, giving the U.S. access to foods that would otherwise be unavailable or prohibitively expensive—not just produce but also meats, cheeses, and innumerable foreign specialty items.

Bringing back food tariffs, as Trump proposes, would stymie this incredible progress, especially for foods that can’t be easily grown here, such as pineapples. With less available supply and new import taxes, prices would almost certainly rise. In fact, the U.S. already imposes tariffs and other barriers on a wide range of imported foods, including beef, seafood, sugar, and tomatoes. Studies consistently show that these trade restrictions inflate consumer prices. (Sugar, for example, costs twice as much in the United States as it does globally.)

In theory, foreign exporters could lower their prices to offset new tariffs, as Trump is fond of claiming. In practice, however, this rarely happens. Evidence from the Trump presidency shows, for example, that American companies and consumers absorbed nearly all the tariffs’ costs, either through additional import taxes or higher prices for both foreign and domestic goods. Given that U.S. grocers already operate on thin margins (historically about 2 percent), the chances of these companies simply absorbing new tariff-related costs, instead of passing them on to you and me, are minimal.

Of course, if foreign food exporters did somehow pay new tariffs without raising prices, then the tariffs wouldn’t protect American farmers, as Trump says they would. The whole point of a protective tariff is to push consumers toward domestic goods by raising the prices we pay for imports. If prices didn’t change, then neither would the purchasing decisions of American shoppers.

In short, if American farmers are earning more because of Trump’s tariffs, then we’re all paying more for the food they make. And if we’re not paying more, then “our farmers” aren’t earning more. Trump can’t have it both ways.

As anyone over the age of 40 can attest, American grocery stores weren’t always the global fantasylands they are today. They were smaller, less diverse, and relatively more expensive. Trump’s plan to restrict food imports could drag us back to that era. So although we’re generally not fans of Kamala Harris’s “We are not going back” slogan, we’re with her in this particular case. We don’t want to go back to a time when, say, blueberries were the occasional luxury, and neither should you.