Investigating price gouging by food & beverage marketers and a higher minimum wage are off the table with the defeat of Kamala Harris in November’s Presidential election. As Donald Trump is about to take the oath of office again, what is the real potential for high import tariffs and a trade war, a reshaping of federal regulatory agencies and a general pro-business/less regulatory theme for the next four years?
"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. Also consider for clues the title of Trump’s own book: “The Art of the Deal.”
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 – with the exception of Robert F. Kennedy Jr. as head of Health and Human Services. His controversial opinions on vaccinations and “poisons” in foods are making even some Republican senators wary.
Dr. Marty Makary, a Johns Hopkins School of Medicine professor, was tabbed for FDA commissioner. He’s also a member of the National Academy of Medicine and a medical news commentator on Fox News. He will replace Robert Califf, who’s completing his second stint atop FDA, having had the same role for part of the Obama presidency.
With the relatively ground-breaking Human Foods Program at FDA just three moths old and still being fleshed out, it will be interesting to see if its current head, Jim Jones, is retained or if a replacement sets back that FDA foods revamp.
While Makary appears to be tilted toward the medical side of agency, Trump said he, will "work under the leadership of Robert F. Kennedy Jr. to, among other things, properly evaluate harmful chemicals poisoning our nation’s food supply and drugs and biologics being given to our nation’s youth, so that we can finally address the Childhood Chronic Disease Epidemic." Presumably even if RFK Jr. is not the head of HHS.
Brooke Rollins is nominated to be Secretary of Agriculture. She was a member of Trump's Economic Advisory Council during his first term and currently is CEO of America First Policy Institute think-tank. Her choice was something of a surprise, according to some media, after former Sen. Kelly Loeffler of Georgia was considered to be the front-runner for the USDA job. She will replace Tom Vilsack at USDA.
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 – uniting both USDA and the food part of FDA -- as has often been suggested.
During the campaign, Trump talked often about tariffs, especially against China. The president-elect has proposed across-the-board tariffs of at least 10% against all imports, including goods from Canada and Mexico, as well as European and Japanese allies. China would be hit with 60% tariffs. In Trump’s first term, 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.
“As and when Trump implements his tariff plans, this will cause serious disruption – in particular, adding significant additional costs for importers,” said Mark Dempsey, senior director of consulting at GlobalData. “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 workers just not show up one day?
In addition to “sealing the border,” Trump proposes mass deportations and an end to birthright citizenship. A sudden drop in the immigrant workforce would cause vacancies in some of the most menial and lower-paying jobs in the food & beverage industry, and even a loss of entrepreneurship, as studies show immigrants start businesses at a higher rate than native-born Americans.