It’s Been a Month and Eggs Are Still Expensive

Photo by Jason Leung on Unsplash

Much of Trump’s victory can be attributed to a generalized discontent with the economy and inflation. Trump himself said the issue would be solved as soon as he was in office.

Much like the war in Ukraine would be solved in 24 hours before he changed it to six months, the immediacy was replaced for a period of worsening before you see an improvement (thanks to Trump’s favorite word, tariffs).

Put another way, it’s been a month, and while there may have been minor fluctuations, egg prices remain high. And they’re likely to stay that way in the near future.

The reason for that is simple and two-fold.

One reason is that the current inflationary crisis is caused by shortages on the supply side. As such, reducing the number of eggs (or any other product) in the market will make them more expensive because there was already a shortage of them.

The second reason is also relatively straight forward. When a tariff is imposed, it basically works as a surtax on whatever product it has been placed on.

In other words, its aim is to serve as a disincentive to the purchasing of a specific product. It is, in other words, akin to a punitive tax on consumers telling them which products to buy or avoid buying.

Say you need a new car and there’s a Chinese or European brand that caught your eye and is affordable.

That Chinese or European car manufacturer will still set prices based on market factors, but the added tariff means you’ll end up paying more for the same product. In the end, you’re just going to have to pay more for your new car. Likewise with other products.

The Tax Foundation estimated that proposed tariffs on imports from Mexico, Canada, and China could add more than $800 in costs to each U.S. household in 2025, underscoring how these policies function as a broad tax on consumers rather than just a penalty on foreign producers.

Tariffs are, when applied for protectionist reasons, a distortion of the free market. They’re aimed at reducing choice and having the State choose winners and losers: much like the right-wing argument against subsidizing industry or any other element of planned economy.

If we are to see an improvement in cost of living and inflation it will be based on restoring strained supply lines and through the resolution of conflicts such as the war in Ukraine (a major agricultural player), not through tariffs or trade wars.

The President would do well to remember that because voters likely will come midterms.