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Trump’s Deranged Plan to Lower Food Prices by Raising Them
(www.theatlantic.com)
So, the reality of the situation is that Trump literally would not pass AP Econ in high school, or a first year of Econ in college.
The basics of tariffs are widely known, not just theoretically as much of more advanced Econ is, but literally through the evidence of history.
This is not the esoteric complexity of regulations on financial markets or determining how to best do taxes or subsidies to minimize or compensate for externalities.
This is like Week 2 of MacroEcon 101.
Maybe literally Week 1.
Trump seems to genuinely think that foreign food exporters have no choice other than exporting to the US, as if we are some kind of monopsony.
He seems to think that, like with his idea of somehow getting Mexico to pay for a border wall, that what he is doing is taxing another country's GDP, directly.
No, just... no.
What happens is first domestic importers pay the import tariff, not the foreign exporters.
Then we get cost pass thru to consumers in the short run, to keep the show running.
Then in the medium term, various kinds of imported foods are just deemed too expensive to eat by consumers, and demand for those imports lessens or stops, they just stop being widely available.
Then in the long run, we might get an attempt to reorient some domestic farms to produce some of these no longer imported foods, but this means less farmland for what we were already making which drives up costs, and the newly domestically produced food is still going to cost more than when they were imported, because wages are higher here...
... unless we allow more migrant workers in to work for a pittance, but he's against that.
And that's assuming any food can be grown at the same cost in any location or climate, which is obviously false.
...
Trump's brain is operating at a level of Mercantilism, a dunce of a mercantilist.
The only way it makes any sense is if you pair that with old school Imperial Colonialism.
We'd have to literally, militarily, boots on the ground, conquer and subjugate all these places we import food from to actually effectively tax those regions and countries directly.
But he also says he is against militarism!
