Investigating price gouging by food & beverage marketers and a higher minimum wage apparently are off the table with the defeat of Kamala Harris in yesterday’s Presidential election. But what’s the real potential for high import tariffs and a reshaping of federal regulatory agencies once Donald Trump becomes president in January?
"Tough or transactional -- which version of Trump will ultimately show up at the White House?" asks data analytics firm GlobalData, which seemed to sum things up nicely.
The heads of major regulatory agencies are presidential appointees, although they require confirmation by the Senate. With Republicans now also controlling the Senate, Trump nominations should be rubber-stamped. Which means Robert Califf at FDA, Tom Vilsack at USDA and Michael Regan at EPA should be circulating their resumes.
But who will replace them? One candidate emerged just as he dropped out as a presidential candidate. After Robert F. Kennedy Jr. removed himself from the race and endorsed Trump, the incoming president seemed to promise the former independent candidate a high-level role in food or other regulatory matters.
“Robert F. Kennedy cares more about human beings and health and the environment than anybody, and he’s going to be, absolutely, having him is such a great honor," Trump said. "I’m going to let him go wild on health, I’m going to let him go wild on food, I’m going to let him go wild on medicine.” Although in typical Trump-speak, specifics were lacking.
In his own campaign, Kennedy spoke against fluoride in drinking water and vaccines, and at one point railed against the U.S. Dietary Guidelines for Healthier Americans, a new, five-year version of which is expected by the end of this year.
In a Nov. 6 post-election interview with National Public Radio, Kennedy was asked if he expected a Senate-confirmed post in the new government. Kennedy sounded like he did, but noted, “We have not yet decided what exactly that strategy is going to be but that’s a possibility.”
Once a critic, Elon Musk became a close Trump confidante and huge donor in this election cycle. His name has been floated by the president-elect for some influential post, possibly for a new government efficiency commission to audit the entire federal government – some of which regulate his several companies, not just yours.
During the campaign, Trump talked about tariffs, especially against China. His 2018 tariffs ignited a global trade war and led to worsening relations of all sorts with China – although President Joe Biden retained many of the tariffs. For his second term, Trump has proposed raising levies on China to 60% and across-the-board tariffs of at least 10% against imports, including goods from European and Japanese allies, according to Barron’s.
Again, with Republicans in control of both houses, such a proposal should be easy to pass.
“It looks like Trump will make good on his most commonly repeated campaign pledges – starting with his plan to upend global trade with a 10-20% baseline global tariff and 60% or higher tariff on Chinese imported goods,” said Mark Dempsey, senior director of consulting at GlobalData.
“As and when Trump implements his tariff plans, this will cause serious disruption – in particular, adding significant additional costs for importers. Despite Trump’s assertions to the contrary, tariffs are paid by the companies or entities importing goods and not by the countries themselves. This means the cost of buying products from overseas, whether directly or as an input for manufacturing, would rise sharply along with retail prices.
“However, you can expect the [rest of the world] to devise retaliatory tariffs of their own commensurate with those imposed on them,” Dempsey continued. “This level of intervention on both sides will likely start a new global trade war.”
What about non-citizen immigrants, many of whom work at menial jobs in food & beverage plants? As part of a Trump administration crackdown on immigration, will your plant be raided or will some wokers just not show up one day?
Bloomberg wrote this morning: "US stock futures roared and the dollar hit a one-year high. Treasuries slumped, partially reflecting concerns about the potential for increased budget deficits and inflation."
We asked a couple of food-related trade associations for comment. In addition to the traditional "we look forward to working with" comments, Consumer Brands Assn. seemed to be referring back to Harris' promises to fight "price-gouging" by food companies:
“In this challenging economic climate, where inflation continues to strain household budgets, it's critical that policymakers avoid implementing measures that could create unnecessary barriers or costs. Such policies would disproportionately impact those Americans already struggling to make ends meet."
The Global Cold Chain Alliance responded, “We are also committed to promoting the growth of exports from U.S.-based food production and broader manufacturing sectors. We will engage constructively in the policy discussion about future trade policy and continue to make the case for the importance of maintaining balanced and resilient trade routes for food and other temperature-controlled products across the world.”
One prominent FDA-watcher said he sees no new regulations coming down in a new Trump administration, but he wondered if this was an opportunity to further reorganize food safety, possibly with a single, standalone agency.
We’ll add to this story as we get more insightful comments.
Our colleagues at Industry Week have a more wide-ranging industrial view of a Trump presidency. They "explore the policy suggestions from manufacturing advocacy groups for the next Trump administration, emphasizing the need for bipartisan support, regulatory relief, and energy reform" at:
Manufacturing Policy Recommendations for President-Elect Trump | IndustryWeek
