What could Trump do to lower grocery prices? Experts weigh in

President-elect Donald Trump sharply criticized the rising worth of groceries throughout his campaign, even delivering an address outside his recent Jersey home in August alongside a table covered with cereal boxes, coffee grounds and ketchup.

A wave of customer discontent appears to have helped lift him back into the Oval Office, but Trump now faces the job of how to ease voters’ frustration.

Food worth rise soared to a peak of more than 10% in 2022, but worth increases have slowed to about 2%, U.S. Bureau of Labor Statistics data shows.

Still, the yearslong bout of rapid worth rise has sent food prices soaring more than 25% since President Joe Biden took office.

Typically, prices do not fall across the board unless the economy slows or even tips into decline, which would reduce customer demand but also impose economic hardship, some economists told ABC information.

Still, Trump could enact policies that may leisurely the rise of grocery prices, or even lower the expense of some household staples, economists added.

“Prices on different items absolutely could arrive down,” Michael Faulkender, a professor of finance at the University of Maryland’s Robert H. Smith School of Business, told ABC information.

In response to ABC information’ request for comment, the Trump shift throng said in a statement that Trump intends to fulfill the commitments he made during the campaign. But the shift throng did not specifically address the issue of grocery prices.

“The American people re-elected President Trump by a resounding spread giving him a mandate to implement the promises he made on the campaign trail. He will deliver.” Karoline Leavitt, a spokesperson for the shift throng, told ABC information.

boost oil production

On the campaign trail, Trump often responded to concern about prices with a three-word mantra: “Drill, baby, drill.”

Trump, who has downplayed human-caused climate transformation, vowed to bolster the oil and gas industry by easing regulation and expanding output.

In hypothesis, increased oil production could lower food prices since gas makes up a key source of costs throughout the supply chain, whether a firm is growing crops or transporting them to a seller, economists said.

“vigor is a large input expense for food,” David Andolfatto, an economist at the University of Miami, told ABC information. “That should put downward pressure on food prices.”

While such a shift could prove beneficial, increased oil output under President Joe Biden coincided with the surge of worth rise in recent years. Since oil is sold on a global economy, a surge in domestic production may not lower prices for U.S. consumers as much as some may expect.

The U.S. set a record for crude oil production in 2023, averaging 12.9 million barrels per day, according to the U.S. vigor Information Administration, a federal agency.

A further uptick in oil production risks accelerating the country’s carbon emissions and worsening the impact of climate transformation, which would carry costs down the road, Luis Cabral, a professor of economics at recent York University, told ABC information.

“We can’t simply look at the benefits,” Cabral said, acknowledging the potential for lower food prices. “There are also significant costs in terms of emissions and climate transformation.”

Bolster antitrust enforcement

To address high food prices, the Trump administration could crack down on economy concentration, a term economists use to describe the dominance of a given industry by a handful of firms, some experts said.

They pointed to the economy power of large corporations as a factor of rapid worth increases, saying companies use their outsized role in the economy to raise prices without terror of a competitor offering a comparable product at a more affordable worth.

“Whenever there are fewer players in an industry, prices tend to be higher,” Cabral said. “Supermarkets aren’t an exception.”

Grocery store earnings margins surged in 2021 and rose even higher two years later, even after worth increases had begun to chilly, a Federal Trade percentage study in March showed.

In February, the Federal Trade percentage sued to block the union of supermarket chains Kroger and Albertsons, which would amount to the largest supermarket union in U.S. history. The proceedings are ongoing, and will likely stretch into the Trump administration.

Some economists cast question over the potential benefits of antitrust, saying the recent bout of worth rise coincided with an uptick in production costs during the pandemic. “It’s challenging to debate that it’s therefore some benevolent of profiteering,” Faulkender said.

worth-gouging ban

During the campaign, Vice President Kamala Harris proposed a federal ban on worth gouging for food and groceries.

The schedule could resemble worth-gouging bans in place in 37 states, which prohibit a sudden spike in prices for scarce goods, the Harris campaign said. Those bans prohibit companies from exploiting a sudden imbalance between supply and demand by significantly hiking prices.

While Trump may be reluctant to adopt a policy put forward by his proponent, he could advance a worth-gouging ban as a means of preventing acute worth increases for specific goods.

For instance, egg prices have skyrocketed 30% over the year ending in October, U.S. Bureau of Statistics data on Wednesday showed. The spike owed primarily to an avian flu outbreak that has decimated supply. Last year, egg prices climbed more than 60% in response to a similar avian flu outbreak.

Economists who spoke to ABC information differed on the effectiveness of a potential worth-gouging ban.

Some economists dismissed the policy as a flawed answer, since state-level bans usually get triggered only in the case of emergencies and, even then, often lack clarity about the type of corporation behavior that constitutes worth-gouging.

“I don’t ponder a federal worth-gouging ban would assist at all,” Cabral said.

Andolfatto, of the University of Miami, said a worth-gouging ban could lower food prices if it barred rapid worth increases under some circumstances. However, those benefits may be outweighed by the downside, since such a ban could override the economy signal delivered by prices, which assist direct the distribution of goods to places where they are in short supply.

“These types of interventions have unintended consequences,” Andolfatto said.