Both US presidential hopefuls have made statements on the problem of high food prices. But their positions range from the sublime to the ridiculous. Only one candidate makes sense on lowering food costs. The other doesn’t seem to understand the issue at all…
One candidate has pledged to press the supermarket chains to reduce the retail price of food. The other has decided foreign food exporters should foot the bill. Guess who’s who?
A proactive approach
Democratic candidate Kamala Harris has pledged to press US food manufacturers and retailers to reduce the retail price of food. Inflation is waning (at least the rate it’s rising is slowing), but con-sumers have seen no significant relief.
Harris has gone as far as to say, if the food industry doesn’t fall in line and make sure all Americans can afford a healthy diet, her administration will bring in laws and regulations controlling food prices.
A confusing stand
Republic candidate Donald Trump says reducing food prices will be a no-brainer under a new GOP administration. He’ll simply smack all food imports with a 100 percent tariff. He claims that will force foreign exporters who want to sell their products to the US to pay for the privilege.
He claims the plan will generate billions of dollars to help offset high food costs. At least that’s what it sounds like he’s saying.
Flawed logic
The problem with Trump’s ‘solution’ to high food prices is, he seems not to understand how tariffs work.
In reality, foreign companies that want to sell their goods in the US do not pay for the privilege. And they don’t ‘send’ their products. They simply fulfill orders placed by US buyers who want their pro-ducts. Tariffs only come into play when goods arrive in US.
At that point, the US buyers who ordered the good must pay the tariffs to get them past customs. And the tariffs become part of the eventual retail price of the goods in question. Which means consumers actually pay the tariffs at their end of the ‘supply chain’.
Multiple problems
Trump’s logic is not only flawed. His ‘plan’ illustrates his complete and utter failure to understand how tariffs work. I’m sure may of his political and economic advisors have tried to explain it to him by now. But he either still doesn’t get it, or just refuses to accept reality. Or, maybe he does get it – and imagines his ‘base’ and millions of other Americans are dumb enough to believe his egregious tariff lies.
Whatever the case… Trump is cruising for a brusin’, politically and economically, if he sticks to his proposal.
‘What could go wrong?’
A heck of a lot. Can you spell ‘disaster’?
First, Trump’s proposed tariffs would double the base price of imported foods right off the dock. Ordinary folks are already struggling to afford enough decent food to feed their families.
What’s worse is, that base price would be added to and, in some cases, compounded upon as the products move through the domestic supply chain to the supermarkets.
Masses of consumers would simply refuse to by them. And that would have further serious consequences.
Consumers suffer again
Shoppers would also have a severely restricted selection of foods they could afford. The percentage of their food purchases involving domestically-made, less healthy processed foods would likely in-crease. They would be forced in that direction simply to put enough food on the table to survive. But why?
The reality is, the vase majority of the healthiest foods – particularly fresh fruits and veggies – sold in US supermarkets come from overseas.
A lesson in reality
“Imports are essential to the U.S. grocery market today, and to its steadily increasing abundance,” Scott Lincicome and Sophia Bagley explained this past week in The Atlantic.
“In 1980, the typical supermarket carried only about 100 different produce items. Selection was lim-ited 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 Admin-istration, 55 percent of fresh fruits and 32 percent of fresh vegetables in the United States are sourced from abroad.”
My take
Lincicome and Bagley brand Trump’s food price ‘solution’ as nothing less than ‘deranged. At the very least, it would erase the minimal progress that has been made on food prices at the global scale.
I hasten to point out that Trump’s plan would do nothing to address relentless price gouging by the supermarkets, as reflected in record high profits reported by both manufacturers and retailers since the beginning of this year, all over North America.
Taking the broader, continental view, Canadian lawmakers would do well – and would ingratiate themselves with their voters – if they emulate the Harris plan…
~ Maggie J.