Anthony Chan, former chief economist at JPMorgan Chase & Co., said lowering prices will be a “first-day priority” even though he is already president of Barney & Co. Responding to Kamala Harris.
A serious concern among economists is that President-elect Donald Trump’s proposed sweeping tariffs on imported goods would push up food prices.
Trump campaigned on a promise to cut costs for households as spending soars across the economy. Food products are no exception, with prices rising due to a combination of economic factors such as geopolitical tensions, weather events, supply chain disruptions and inflation.
Although the pace of inflation has slowed, rising 2.6% in October, the cost of groceries is still 20% to 25% higher than four years ago.
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The proposed 10% to 20% tariffs on all foreign imports and the proposed 60% to 100% additional tariffs on imports from China in particular would reduce shoppers’ costs. That could make the situation even worse, as they will bear the brunt of the increase, food economist David Ortega said. a Michigan State University professor told FOX Business.
“Tariffs drive up domestic commodity prices by increasing production costs and reducing competition. Ultimately, higher costs are passed on to consumers, once again placing the brunt of the burden on low-income households.” said Ortega.
Trump Vance’s transition press secretary, Caroline Levitt, told Fox Business that the tariffs imposed on China during President Trump’s first term “created jobs, stimulated investment, and resulted in no inflation.” ” he said.
He said President Trump plans to restore the economy by “re-securing American jobs, lowering inflation, raising real wages, cutting taxes, cutting regulation and untying American energy.” He said there is.
A sign in the produce section of the Target Corporation flagship store in Edina, Minnesota, USA, on Thursday, September 5, 2024. (Ben Brewer/Bloomberg via Getty Images/Getty Images)
But when low-income households spend a large percentage of their income on food, they are forced to make difficult trade-offs, including cutting back on other necessities like housing, health care, and transportation to keep food on the table. . said Ortega.
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Felix Tinternot, an economics professor at Duke University, said the proposed import tariffs would be imposed on all countries, so to avoid passing on higher costs to consumers, they would “force production to sit on the sidelines.” It cannot be relocated.”
A woman shops for groceries on September 15, 2023 in Brooklyn, New York. (Paola Chapdelaine for The Washington Post via Getty Images/Getty Images)
In 2018, import duties were imposed on all countries exporting washing machines and steel to the United States, leading to significant price increases for consumers, Tintelnot said.
Tariffs would raise the cost of items imported by domestic producers, including the cost of other inputs such as fertilizer, farm equipment, and the raw materials that food producers use to make their food.
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Tinternot said if tariffs raise the price of foreign food, domestic producers could also take advantage of increased demand for their products and raise prices.
Apples lined up at a grocery store on June 11, 2024 in San Anselmo, California. (Justin Sullivan/Getty Images/Getty Images)
But Ortega warned that the tax could have other consequences, including retaliatory tariffs from other countries.
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“Recent history shows that other countries cannot sit idly by when it comes to retaliation,” he said.
Ortega was referring to the U.S.-China trade war six years ago, when China responded with retaliatory tariffs that affected U.S. farmers.
Retaliatory tariffs reduced U.S. agricultural exports by more than $27 billion (or an annualized loss of $13.2 billion) from mid-2018 to the end of 2019, according to 2022 data from the USDA. China accounted for about 95% of the losses, the ministry said.
