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14 Nov 2024


NextImg:We're Economists. Here's What We Really Think Of Trump's Plan To 'Lower' Grocery Prices.
Graffiti by the Portuguese artist Kilos depicts Donald Trump with a banana in his mouth.
SOPA Images via Getty Images
Graffiti by the Portuguese artist Kilos depicts Donald Trump with a banana in his mouth.

One of Donald Trump’s key campaign promises was to combat perhaps the most painful aspect of inflation: rising grocery costs. Many pundits have cited “egg-flation” as one of the reasons Trump won. But what is the former president-turned-adjudicated felon-turned-president (again)-elect’s actual plan to lower food prices for average Americans?

In the words of the formidable Lucille Bluth from “Arrested Development,” “It’s one banana, Michael, what could it cost? $10?”

And now the answer is … maybe?

We spoke with expert economists about Trump’s “concepts of a plan” while also looking back on what the incoming president has promised so far.

The Effects Of Tariffs On Imported Goods

At a September rally in Flint, Michigan, Trump told supporters in his usual hyperbolic style, “Tariffs are the greatest thing ever invented.” He went on to repeatedly promise tariffs on foreign imports at many of his recent campaign rallies.

The president-elect believes that tariffs, which are essentially import taxes, will cause a boom for American factory jobs, shrink the federal deficit and lower food prices.

These proposed tariffs, according to the economists we spoke with, will indeed have a substantial effect on food prices — but not in the positive way the president-elect hopes.

Trump’s tariff plans have been largely focused on China but could extend to other countries as well, including some of America’s primary suppliers of fruits and vegetables. Trump openly proposed at least a 10% tariff on all imported goods, a 60% import tax on goods from China and a 25% tariff on goods from Mexico.

For example, at a rally in North Carolina, Trump threatened a 25% tariff on Mexico if Claudia Sheinbaum, Mexico’s new president, fails to stop what he called the “onslaught of criminals and drugs coming into our country.” In 2021, Mexico supplied almost two-thirds of U.S. vegetable imports and about half of U.S. fruit and tree nut imports, according to the U.S. Department of Agriculture.

Dietrich Vollrath, professor and chair of economics at the University of Houston, told HuffPost that if the tariff on foreign products is 20% or more, “grocery prices will be demonstrably and persistently higher.”

“If Trump signs an executive order mandating the tariffs on Day 1, then you’ll see this almost immediately. And your diet will get more homogenized and more expensive.”

- Dietrich Vollrath, professor and chair of economics at the University of Houston

According to the USDA, Mexico supplies 51% of all the fruit we buy, and 69% of our vegetables are imported — which could mean tariffs imposed on foreign products will translate into prices that are anywhere from 5-20% higher, according to Vollrath. He also believes the rise in prices will be swift. “If Trump signs an executive order mandating the tariffs on Day 1, then you’ll see this almost immediately. And your diet will get more homogenized and more expensive.”

Michael Clemens, professor of economics at George Mason University and a fellow at the Peterson Institute for International Economics, anticipates that new tariffs would not increase prices quite as much as Vollrath predicts, but says they’d still result in noticeably higher grocery bills. “Those tariff taxes alone will cause U.S. consumers to pay 1.4-5.1% more for the same items, according to nonpartisan analysis by The Budget Lab at Yale University,” Clemens told HuffPost.

Dr. Luis A. Ribera, a professor at the Department of Agricultural Economics at Texas A&M University, pointed out that tariffs will increase product costs, making groceries more expensive, but also added that if Trump succeeds in removing the income tax, Americans may have more money to spend.

Michael Mezzatesta, a climate activist and economist, estimates that Trump’s proposed tariffs would cause prices to rise by about $3,900 per year for the average U.S. household. “This would represent a 5% income loss for the median-income household. And it would hurt low-income people most, because household purchases make up a larger share of their spending (whereas richer people would be more able to afford these price increases).”

Donald Trump and senior adviser Ivanka Trump at the White House on May 19, 2020, at an event on “supporting our Nation’s farmers, ranchers, and food supply chain.”
Pool via Getty Images
Donald Trump and senior adviser Ivanka Trump at the White House on May 19, 2020, at an event on “supporting our Nation’s farmers, ranchers, and food supply chain.”

But how will these tariffs impact domestic American producers? Vollrath anticipates domestic producers will adjust to some extent: “Domestic producers are not dumb,” he said. “They can and/or will take advantage to increase their own prices,” knowing demand will increase.

Vollrath warns that the expected tariffs will also mean we’ll be seeing less variety at grocery stores. Consumers will want more affordable options, making imported fruits and vegetables less profitable for stores to stock.

“As you and I lower our demand for them, it will mean rather than seeing 10 varieties of apples to choose from, you might only see 5 or 6.” And things that are out of season in the U.S. will also disappear from the markets.

The Effects Of Trump’s Mass Deportation Plans

It’s not just the tariffs that could have sweeping impacts on your grocery bills. There are other factors economists are watching, like Trump’s mass deportation plans.

Tom Homan, the former acting director of U.S. Immigration and Customs Enforcement, has been tapped to be the Trump administration’s “border czar.” Homan has publicly vowed to “run the biggest deportation force this country has ever seen.”

And Trump, at his now-infamous Madison Square Garden rally in New York this past October, stated that “On Day 1,” he plans to launch “the largest deportation program in American history” and have a closed border.

Clemens believes Trump’s mass deportation plan is “massively expensive and cruel, requiring probably hundreds of billions of dollars.” The exact number of undocumented workers in agriculture in the United States is debated, but most agree the numbers exceed 5 million an estimated 73% of agriculture workers in the United States.

“Think of the situations that occurred during the pandemic when various processing facilities had to shut down; we’d be doing this to ourselves on purpose, but permanently.”

- Vollrath

And the impact of these deportations could have a larger bite than Americans can withstand at the grocery store.

Clemens pointed out that the fruits, vegetables, meat and dairy products that we produce in the U.S. rely on several million undocumented and H-2A immigrant workers. “Most of those farm workers do not have permanent legal residence in the United States,” and workers on the H-2A Agriculture Temporary Work Program are also at risk of deportation. The temporary visa is one that Project 2025 has proposed phasing out.

Vollrath warned we might lose nearly all production of almonds, olives and raisins, and a massive portion of our “salad” vegetables like lettuce and celery. He also noted that undocumented and immigrant workers staff parts of the meat and dairy supply chain, “meaning that even absent of the tariffs you are looking at substantial price increases if not absolute shortages.”

“Think of the situations that occurred during the pandemic when various processing facilities had to shut down; we’d be doing this to ourselves on purpose, but permanently,” Vollrath added. He said it could cause a “classic supply shock to the U.S. economy.”

By eliminating these workers, supply will be slower, amping up demand. There will be a huge vacuum of available workers who are willing to work for the same wages as immigrant and undocumented workers. These are workers who also largely do not have access to legal representation.

Ribera hesitated to provide estimates for the costs of mass deportation, saying more research needs to be done.

The Potential Long-Term Impact

In the short term, if Trump implements his proposed economic and immigration policies, economists anticipate rising prices and potential shortages — but the long-term impact of a second Trump term, Mezzatesta warns, will be costly as well.

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“We should all be alarmed by the Trump administration’s unwillingness to acknowledge the long-term environmental effects of his economic policies. We can only ignore these costs for so long, until they become astronomical – and therefore impossible to ignore.”

Mezzatesta believes that as Trump’s economic policies compound, we will begin to see more extreme weather events, more property damage, more costs to our health care system, and ever-accelerating biodiversity loss.

“Some studies anticipate that the global economic cost of climate change could reach $38 trillion per year within the next 25 years. We can only ignore these consequences for so long — and I worry that Trump will be long gone by the time the rest of us have to pay up.”