How does President Trump affect the price of groceries in Lexington?
Grocery prices are generally considered as one of the primary economic indicators of the U.S. economy’s health.
Inflation played at least a partial role in Donald Trump’s reelection, with 96% of voters saying “high prices for gas, groceries and other goods” factored into how they cast their vote, according to CNN.
Voters who said inflation was their top concern were twice as likely to vote for Trump.
Though Trump touted Biden’s economy as the worst in American history, U.S. News and World Report said Trump inherited a stronger economy than he left in 2021.
The Washing Center for Equitable Growth, a non-partisan research group, said Trump took hold “of a U.S. economy largely on solid footing.”
They cited high gross domestic product production growth, high employment levels and wage growth as marking the economy strong.
President Trump promised to lower grocery prices on his first day in office. A Herald-Leader analysis showed Lexington grocery prices have actually increased slightly since the start of Trump’s second term.
Can the president make groceries cheaper?
The government can affect the price of goods by adding or removing production regulations or tariffs.
For instance, if the government decides to require additional food safety standards for grocery store suppliers, the price of production will increase, said Mike Clark, an associate economics professor at the University of Kentucky.
That increased cost of production gets passed on to the consumer to keep funding production.
“One of the things that we saw in terms of the previous Trump administration is they were more inclined to roll back some of those regulations,” Clark said.
“By removing those regulations, that tends to lower the business’s cost. If there’s sufficient competitive pressures, that will get passed on to the consumers in terms of lower prices.”
The other way the government influences domestic pricing is through tariffs, which are taxes on imported goods.
Trump imposed a 10% tariff on foreign goods entering the U.S. starting April 5. He has placed higher tariffs on some countries, like a 25% tariff on products form Mexico and Canada.
Trump paused those tariffs until July to help stabilize the economy, but Commerce Secretary Howard Lutnick said he expects all tariffs to be back in place once the 90 day pause ends.
The U.S. imports some groceries, like bananas and avocados, that grow better in other climates.
Companies sending products into the United States have to pay tariffs to get their goods into the country. That, in turn, makes grocery prices higher, in a similar way that additional safety regulations would.
The cost to send goods to the U.S. would be higher for suppliers, so they increase the price of their goods for consumers to keep up with the additional cost.
With the price of imported goods increasing, people may turn to domestic products as a cheaper option.
But that has a downstream effect too.
“If we all stop eating (imported goods) and we switch over to something else that’s produced in the US, then demand for that product in the US goes up,” Clark said.
“That means inflation on those domestically produced goods goes up as well.”