Why prices won’t go down as fast as Trump promised they would, and why he’s backtracking now that it’s reality time
Trump’s credibility on a rapid, post-inaugural decline in food prices is showing some cracks, if not self-destructing altogether. What’s amazing to me is that people actually believed him in the first place.
At an August 14 rally in Asheville, North Carolina, Trump told a throng of supporters a fantasy tale about how, if they elect him, prices would drop in a hurry. “Prices will come down,” he said. “You just watch: They’ll come down, and they’ll come down fast.”
Now that he’s president-elect, of course, Trump has to change his tune to suit the reality of the marketplace. In an interview with Time Magazine a few days ago, Trump backtracked from his prediction about groceries coming down fast, saying that “it's hard to bring things down once they're up. You know, it's very hard.”
A source much closer to the situation than Trump made it clear last week that Trump’s idyllic notion about food prices coming “down fast” was pure political balderdash.
The source? Wal-Mart CEO Doug McMillon. The venue? Last week’s Morgan Stanley Global Consumer & Retail Conference. McMillon flat out refuted Trump’s empty promise by telling the conference that customers could expect to see higher grocery prices for the foreseeable future. Said McMillon, “I’m disappointed to see food inflation start to tick back up.”
With some background in food production during my years as a commodity futures broker/trader, along with a multi-year spell as a cattle feeder, I knew that Trump was full of hot air. I mean, the very notion that food prices would come down with a snap of his presidential fingers is ludicrous.
And, the notion is not only ludicrous, it is entirely inconsistent with his immigration policies and his threat to impose substantial tariffs on Mexico.
Somebody needs to explain how raising tariffs on Mexico will reduce grocery prices in the United States. According to the U.S. Dept. of Agriculture, Mexico in 2023 supplied 63% of our vegetable imports and 47% of our fruit and nut imports. In 2021, imported vegetables and fruits accounted for 60% and 38%, respectively, of our country’s total availability of those products.
Tacking on a 25% tariff to Mexico’s huge component of that supply is no way to lower grocery prices, considering those tariffs are ultimately paid by American consumers.
As to the effect of Trump’s plan for mass deportation of undocumented immigrants, his alma mater The Wharton School of Business recently showcased a CNN article titled “Grocery prices are high. Trump’s mass deportations could make matters worse.” The article goes on to say “mass deportations threaten to starve key industries of badly needed workers. And perhaps no industry relies on undocumented workers more than the food and agriculture industries.”
If Wharton (which, by the way, thinks Trump’s tax and spending proposals will increase federal deficits by $5.8 trillion over the next 10 years) isn’t buying Trump’s plan, I’m not buying it, and neither should Wharton alum Donald Trump be buying it.
But then again, maybe the President-elect really isn’t buying his own illusions, after all.
Why else would he suddenly be backpedaling on his promise that grocery prices will be coming down fast as soon as he’s sworn into office?
John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam. Republish with permission.
Photo: public domain, wikimedia commons
