'Deranged': Experts tear apart Trump's 'ludicrous' plan on grocery prices
When former President Donald Trump was asked about his plan to lower the cost of groceries, he said that he would slap tariffs on foreign food imports.
Scott Lincicome and Sophia Bagley of the libertarian Cato Institute, however, believe Trump's plan is "deranged" and they write in The Atlantic that tariffs on imported foods would do nothing but raise prices for consumers.
"As a plan to lower grocery prices... Trump’s protectionism is ludicrous," they write. "If implemented, it could even return us to the bad old days of American grocery scarcity."
The authors then show how global trade in produce over the past 40 years has vastly expanded Americans' access to different kinds of foods, to the point where "55 percent of fresh fruits and 32 percent of fresh vegetables" in American grocery stores come from foreign countries.
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Anyone who loves avocados, for instance, should understand that the vast majority of them are imported from Mexico, which means Trump's tariffs would make it significantly more expensive to produce guacamole, among other culinary staples.
The two Cato scholars also explain that Trump has no idea has tariffs work, as he likes to portray them as win-win measures that will result in major surpluses for American consumers.
"In theory, foreign exporters could lower their prices to offset new tariffs, as Trump is fond of claiming," they write. "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."