Trump's Tariffs, Food Prices, and Inflation

The Bai-Den Gang is not the only set of professional liars in DC.  

New analysis of the long-term impact from Section 301 tariffs triggered by President Trump against China, shows just how consequential economic nationalism can become.

Our own analysis of U.S. consumer prices in 2019 showed that prices of imported goods actually declined despite the tariffs. A recent report from CPA takes a look at the impact to Chinese exports to the U.S.  [SEE DATA HERE] Bottom line, the tariffs worked to reduce Chinese imports....

So those who screeched that Trump's tariffs would INCREASE the cost of goods were.......ahhh.......lying.

Yes, there were a few factors at work:  first, Trump's drive to make the US into the #1 energy producer had the very important benefit of reducing the cost of energy which is a factor in the price of goods.  But beyond that, Trump broke the back of Big Ag (Cargill, General Foods, JBS, et.al.) too.  Finally, Trump's tariffs caused other nations to devalue their own currencies, meaning that the US dollar's value increased.

 ...For the previous twenty years, food prices had been increasingly controlled by Big Ag, and not by normal supply and demand.   The commodity market became a ‘controlled market’. U.S. food outputs (farm production) was controlled and exported to keep the U.S. consumer paying optimal prices.

President Trump’s trade reset was disrupting this process.  As farm products were less exported, the cost of the food in our supermarket became reconnected to a ‘more normal’ supply and demand cycle.  Food prices dropped, and our pantry costs were lowered....

 ...This meant when we imported products, we were also importing deflation.

This price result is exactly the opposite of what the economic experts and Wall Street pundits predicted back in 2017 and 2018 when they were pushing the rapid price increase narrative.

Because all the export dependent economies were reacting with such urgency to retain their access to the U.S. market, aggregate import prices were actually lower than they were when the Trump tariffs began...

We know who won:  the US consumer.

Who lost?

Look at the campaign contributions made to NOT-TRUMP Republican candidates.  You could start with Koch Industries and its property, the Club for Growth.  Then watch Sequoia Capital and Goldman.

In the short but very accurate phrase:  Follow the Money.