President-elect Donald Trump says Americans’ inability to afford groceries will be a thing of the past. “They are going to be affording their groceries very soon,” he said Thursday before ringing the opening bell at the New York Stock Exchange, where he was named Time’s “Person of the Year.”
Americans spent 22% more on groceries last month than when Trump left office in January 2021, according to November Consumer Price Index data released earlier this week. In November, Americans spent 27% more on groceries than they did in February 2020, prior to the pandemic.
Trump mentioned “an old woman” who went to the grocery store to buy three apples. “She set them down on the counter, looked at the price, and said, ‘Would you excuse me?’ “And she walked one of the apples back to the refrigerator,” he explained.
On the campaign trail, Trump emphasised drilling more oil as a way to help Americans afford more food. However, ahead of his return to the White House, his strategy for lowering grocery prices has shifted slightly, with a focus on supply chain issues as well as increased oil drilling.
‘It’s hard to bring things down once they’re up’
During his campaign for president, Trump held a press conference in August in front of a table full of packaged foods to talk about food prices going up. He said, “Food prices have gone through the roof.”
“When I win, I will bring prices down right away, from the first day,” Trump said. He was talking about increasing oil production in the United States. “We will drill, baby, drill,” he said. “Everything will cost less after that.”
Economists usually like it when prices slowly rise across an economy instead of falling, which is called deflation and can make people put off buying things. Also, when prices drop a lot, it is usually because more people are out of work and the economy is going down.
In his Time Magazine “Person of the Year” interview, which came out Thursday, Trump talked about rising food prices and said, “It is hard to bring things down once they are up.” “You know, it is really tough…”I believe they will, though. I believe that energy will weaken them.
He went on, “I think a better supply chain will bring them down.” “The supply chain is still broken,” she said.
One of the main reasons food prices went up during the pandemic was that there was not as much imported food because shipping became less available and freight times grew. But those problems have been mostly fixed since then.
According to monthly Global Port Tracker reports put together by the National Retail Federation and Hackett Associates, the amount of import cargo reached almost all-time highs not long ago.
At his press conference in August about rising food prices, Trump talked about “supply chain problems” as a reason why housing costs are going up, but not as a reason why food prices are going up.
His slightly different view on food prices comes at a time when the US hit a new record for weekly crude oil production on December 6: 13.6 million barrels per day. This is based on federal data that goes back to 1983.
In a statement on Thursday, Trump said, “There is no country in the world” that makes more oil than the US. That has helped bring down the price of petrol, which in turn has helped bring down the cost of shipping food to grocery stores across the country.
CNN talked to experts who said that even if it were possible to drill more, it would not make a big difference in lowering grocery prices because of many other factors. A more effective strategy might be to work on making supply chains better, but it will not be easy to do.
As an example, huge amounts of traffic have been blocked in two important international shipping routes: the Suez Canal because of attacks on ships by Houthi militants that have been going on for months, and the Panama Canal because of a historic drought.
Some of Trump’s proposals risk raising food prices significantly
Still, even if Trump helps fix problems in the supply chain, other policies he has promised to implement, such as broad-based tariffs and mass deportations of immigrants who came to the U.S. illegally, could make food prices go up a lot.
When it comes to deportation, the food and farming industries depend on migrant workers a lot. Without it, those industries are likely to have trouble finding workers, which could mean they have to raise wages.
It is likely that the higher cost of labour would then be passed on to customers through higher prices. There might not be enough workers to support food production, which could lead to food shortages and likely push prices even higher.