Trump’s Plan for Food Prices Proves He Doesn’t Understand Supply and Demand
The former president is repeatedly displaying an inability to understand basic economics
At a recent Town Hall event in Flint, Michigan, one of Donald Trump’s supporters asked the former President an important question; “How are you going to bring down the cost of food and groceries?”
Trump could have responded with a clear, detailed plan consisting of policy proposals that involve cutting taxes in a feasible way that would actually lower food costs. That’s what Vice President Kamala Harris did last month, offering voters a realistic and feasible solution to a significant problem. But Trump addressed the question first by promising to reduce everyone’s energy bill by 50% within a year without explaining how that related to the cost of groceries. When he finally got to answering the woman’s question, he stated:
“We gotta work with our farmers. Our farmers are being decimated right now. They’re being absolutely, absolutely decimated. And you know, one of the reasons is we allow a lot of farm product into our country. We’re gonna have to be a little bit like other countries. We’re not gonna allow so much come — we’re gonna let our farmers go to work.”
Let’s take that statement in context. Trump seems to think that if he decreases the supply of agricultural products in the United States their prices for the average consumer will also go down. But how does that make any sense? As a report from Netsuite states, “The law of supply and demand predicts that if the supply of goods or services outstrips demand, prices will fall. If demand exceeds supply, prices will rise.” If that holds true, Trump’s plan for lowering the cost of groceries in America would have the stark opposite effect, sending the prices of meat, milk and eggs skyrocketing as the limited supply pushes demand up by staggering amounts.
What happens if America’s farmers can’t produce the necessary goods fast enough to keep with supply? Trump didn’t address that, opting to brag about how much he loves America’s farmers despite his history of implementing policies that harmed them. A 2020 study from the nonpartisan Center for American Progress (CAP) found his administration consistently failed the people of rural America, including most farmers.
Economic experts from both sides of the aisle weighed in on the significant flaws with Trump’s plan. In an X post, Scott Licicome, Vice President of General Economics at the libertarian Cato Institute stated, “technically, you can't get a price lower than zero (bc the food won't be available at all bc it can't be grown in the US for most of the year).”
Dean Baker, a Senior Economist at the Center for Economic and Policy Research also chimed in, noting “That's what you get when you ask someone who both knows nothing about economics and has never had to buy his own groceries in his life.” And
Of course Trump didn’t discuss the corporations that Reich correctly highlighted as being at fault for high food prices. If history is any indication, he'll likely continue the trend of granting tax breaks to big businesses if he takes back the White House. He’s stated that he plans on reducing taxes for corporations even further, bringing the corporate tax rate down to 15%. According to a recent analysis from the CAP Action Fund, this would “Give five of the largest grocery companies—Kroger, Costco, Albertsons, Target, and Walmart—an annual total estimated tax cut of nearly $1.7 billion. They reported over $29 billion in profits.”
In sum, Trump seems intent on addressing a significant economic problem by doing exactly the opposite of what makes sense. As President, he spent four years proving that, as Baker noted, he knows nothing about economics. Obviously, he didn’t spend the past four years reading up on economic theory and policy in an attempt to actually understand the forces that drive our economy. Given his history of making false claims about his record of spurring economic growth, none of this is surprising.