What a Trump Presidency Might Mean to the Food and Beverage Industry

Nov. 17, 2016
While he's hugely pro-business – especially promising less regulation – his stance on trade could mean less access to foreign markets.

The effect a Donald Trump presidency has on the food and beverage industry depends upon which Donald Trump takes the oath of office on Jan. 20.

Will it be the Trump who's going to build a wall on our southern border and send the bill to Mexico? Who wants to eliminate the Environmental Protection Agency? Or the one who, only after winning the election, said there are components of Obamacare that he wants to retain? Who, the day after the election, assured South Korea's president that he would continue to station U.S. troops in her country, even though candidate Trump threatened to withdraw troops from South Korea and Japan if they didn't pick up the tab?

"Dynamic" is a word that gets tossed around a lot, but look it up in the dictionary and one of the definitions is "characterized by continuous change." The Donald's photo should be inset.

One of Trump's quick changes came even before the election. In mid-September, a Trump campaign fact sheet, circulated to supplement a speech the Republican presidential candidate gave to the New York Economic Club, suggested rolling back food safety regulations, including the "food police" at the FDA. The campaign office said Trump would eliminate several regulations, including some of the inspection and enforcement powers of FDA, because they're burdensome and "overkill," according to Associated Press. While Trump's eventual speech did promise fewer government regulations, it did not specifically mention food safety, and within a few hours the Trump campaign deleted the reference to the FDA from its website.

In general, Trump is expected to be a free-market, business-friendly, anti-regulatory president. Would he gut or at least weaken the FDA or USDA? That's not likely, as both the 2011 Food Safety Modernization Act and this year's GMO labeling bills were painstakingly crafted to win bipartisan support. And food safety is likely not an issue even Trump would dare mess with.

There are some changes that seem apparent, and most of these will sit well with the food and beverage industry and big business in general:

  • Immigration reform: Don't look for the wholesale deportation of every illegal immigrant in this country – who provide most of our seasonal labor -- much less a ban on incoming Muslins. If anything, the candidate who made so much hay with the issue may finally force the Republican-controlled Congress to face the music, to make it a Republican issue, not a Democratic one, and craft some kind of immigration reform that makes as much sense to Big Business as it does to xenophobes. Anything more extreme will end up costing business owners, as a smaller labor pool will result in higher wages.
  • Affordable Health Care Act: It's almost certain President Trump and the Republican Congress will jettison parts of "Obamacare." But it looks just as likely that some kind of national health care plan will survive. Just a day before election day in Scranton, Pa., Trump told a rally: "Look at the mess, and look at the corruption. Real change begins immediately with the repealing and replacing of the disaster known as Obamacare." After his day-two meeting with President Obama, Trump said there were provisions of the Affordable Health Care Act he'd like to retain, especially the universality of coverage, even for pre-existing conditions, and the ability for young people to stay on their parents' insurance plans until age 26. Perhaps President Trump will be able to rally enough Republican Congressional support so the GOP can craft a replacement of its own. Ergo, TrumpCare?
  • Trade agreements: This subject cuts both ways for big business. Candidate Trump expressed scorn for most trade agreements, vowing to pull out of the 1994 North American Free Trade Agreement and to renegotiate the Trans-Pacific Partnership (TPP), which has not yet been approved by Congress. Most lobbyists for the food & beverage industry, which is much more of an exporter than an importer, support trade agreements. If Trump keeps his protectionist promises, which include a 45 percent tariff on products from China and a 35 percent tariff on those from Mexico, consequences will follow, says Gary Clyde Hufbauer, a former Treasury official and current senior fellow at the Peterson Institute for International Economics, as quoted in Fox News Latino. But he cited as big losers the likes of Boeing, Caterpillar and General Electric -- not Tyson, PepsiCo or KraftHeinz.
  • Environmental: This might be the issue that most distances Trump from Obama and all previous presidents. Candidate Trump repeatedly and strongly said environmental policies are overwrought. He does not believe in global warming, promised to open up offshore drilling and to allow natural gas or oil pipelines just about anywhere. He promised looser restrictions on coal-fired energy plants and elimination of subsidies that fund alternative energies. The EPA was often in his crosshairs; at one point he suggested eliminating the agency. If that attitude carries over to environmental regulations affecting food & beverage plants, look for looser regulations on site, waste and groundwater restrictions as well as emissions.

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