Three major factors are set to drive prices higher, tariffs, the monopoly power of corporations, and deportations.
Tariffs do not work the way Trump tells us. Let’s say Best Buy imports televisions from China with a 50% tariff. When the shipment is picked up at the dock, a Best Buy employee pays the tariff amount to the customs agent, who sends it to the U.S. treasury.
Then comes the part Trump doesn’t mention. Best Buy does not just absorb the cost of the tariff. You know what comes next: Best Buy increases the price to the consumer to cover its cost. Tariffs always work like this.
Caveat: tariffs can favor Americans only if tariffed products become too expensive to import and manufacturers sell more Americanmade products and hire more American workers. Even in this scenario, though, the price of TVs would be unlikely to fall to the original import price.
Trump’s tariffs, however, are not designed to increase American jobs. They are designed to bully or punish other countries, which will necessarily punish you and me, the American consumer.
The second major factor driving higher prices is the consolidation of markets. Here we’ll just look at the food market. Both Democrats and Republicans lack the will to enforce anti-trust laws. Mom-and-pop grocery stores have died as a result, and groceries have become monopolies in many markets where Albertsons, Kroger, and Walmart effectually control prices.
Agricultural producers have also consolidated into monopolies. For example, only four large companies (Tyson, Cargill, National Beef Packing Company and JBS USA) control 85% of the beef market (https:// www.reuters.com/world/the-greatreboot/ stung-by-pandemic-jbs-cyberattack- us-ranchers-build-newbeef- plants-2021-06-17) Putting more power in the hands of fewer people in fewer places invites glitches in supply chains, as we all experienced during the Covid pandemic.
This monopoly power lets corporations set prices paid to food producers, keep workers’ wages low, and charge customers more. This is how small farmers and ranchers go broke while consumer prices go up.
This situation has not come about through fair market forces but through governmental refusal to enforce anti-trust (monopoly) laws, and the power of Big Ag’s money contributions to influence (buy) politicians.
Trump promised to lower food prices on day one during his campaign. Now he is backtracking and concedes that it’s “hard to bring things down.”
A letter to the president from 20 Democratic members of congress states: “Your sole action on costs was an executive order that contained only the barest mention of food prices, and not a single specific policy to reduce them (https://www.cnn. com/2025/01/28/economy/trumpinflation- price-promises/index. html).” Of course, no one can lower prices in a day, not even a president.
Anyone with large investments in the stock market may be well served in this administration. For those of us who invest in things like bread and eggs, the outlook is grim. We import about 60% of our fruit and 40% of our vegetables from Mexico. When the 25% tariff goes into effect, it will likely increase consumer food prices by an even larger percentage.
The third major factor that will increase food costs is Trump’s plan to deport millions of undocumented workers. In truth, immigrants are not taking away American jobs; the United States has a domestic labor shortage.
Deportation will be a disaster for the nation’s food supply. Immigrants make up about 61% of farmworkers, according to the most recently available data. However, as of a 2022 U.S. Department of Labor survey, 42% are undocumented.
One California grower cited in the Harvard Business Review explains that some of the undocumented workers have been here for 20 or 30 years and speak English. They have been paying taxes and Social Security but haven’t made it all the way through the confusing and expensive citizenship process (W. C. Shib, and V. Chug, Harvard Business Review, January 22, 2025.)
The people who are to be deported are our friends, neighbors, coworkers, and essential workers. When they are rounded up, sent to camps, and deported, fresh produce will be a luxury.
If it is available at all.