Trump would benefit from these seven inflation reducing policies –
1) Proceed with tariffs against China, Mexico and Canada, but hold off for a year on everyone else, to test if we can get trade concessions without risking inflation from extra tariffs.
Tariffs are completely justified against China since their trade distortions undermine the Darwinian advantages of free trade.
The trade status quo with China is anti-Darwinian because their extensive subsidization of their own industry means normal market signaling mechanisms (that would otherwise kill weaker companies and leave stronger ones in place) cannot tell if their industry is actually more competitive/”Fit” than American industry, or, if they are competitive only because of Chinese economic distortions.
This results in inherently “unfit” Chinese firms outcompeting American companies.
The tariffs against Mexico are useful as a way to force their Government to accept all of Trump’s immigration policies, and so are the Canadian tariffs because Canada voted for Justin Trudeau.
However, tariffs beyond these three countries would be more effective as threats to test how many economic concessions Trump can extract than they would be if immediately implimiented.
The reason for this is that the US economy has only recently gotten inflation under control, and the US is still very sensitive to any price shocks.
Therefore, a new round of tariffs on nations beyond China, Mexico and Canada carry a significant political risk that they will set off another round of inflation that Democrats would exploit at Trump’s expense.
Instead, Trump could get economic benefits (without the risk of inflation) by threatening tariffs, but not implementing them, for a year in order to see how many economic concessions he can get from them.
In most cases, trade negotiators would give concessions to Trump while the President would avoid the risk of tariffs initiating a new wave of inflation.
2) Have the FDA automatically approve lab grown meat for sale to the public with a goal of having lab grown meat be 10% of the market within 5 years.
Lab grown meat has technologically matured to a point where it is genetically identical to farm animal meat. Being genetically identical means all lab grown meat tastes, cooks, smells and appears exactly the same as farm animal meat because lab grown meat is real meat.
However, the FDA has still not approved more than a handful of lab grown meat products for sale.
Trump could reduce food inflation considerably if the FDA is told to start automatically approving all lab grown meat for sale provided these companies prove and certify that their meat is nature identical to farm animal meat.
After they certify their meat is nature identical, they then only have to satisfy the exact same FDA standards, and other food safety checks, for contaminants and diseases that livestock meat already goes through.
In the near future, it would be reasonable to expect that 10% of all US meat consumption could originate from labs in a few years, and cut the cost of food for all Americans.
However, it is unlikely lab meat would replace all livestock meat in the medium term because meat laboratories have a number technical challenges that prevent them from scaling up to a level to completely replace farm animals.
For example, meat laboratory vats must be kept unusually sterile because the meat is extremely vulnerable to (literally) being eaten prematurely by bacteria due to their not having an immune system to kill germs, a disadvantage that living farm animals do not have.
Also, this industry has difficulty producing meat that has a complex/inconsistent texture of bone, skin, fat and muscle that exists in cuts of meat such as prime rib or chicken breast.
It has, however, mastered creating meat that is consistent in texture such as any type of ground type meat like ground beef for hamburger, ground pork for sausage, or ground chicken for chicken nuggets.
Fortunately, 50% of all meat sales in the US are ground meat. Therefore, replacing 20% of the ground meat market with lab grown meat would go a long way to cutting food prices, provided the FDA gets out of the way and lets this market start competing on a larger scale.
As lab grown meat replaces ground meat from farm animals it would also reserve more living animals to be used as high-quality cuts of meat like ribeye; which will, in turn, cut prices for even high quality meat dishes.
3) Have the FDA automatically reciprocate pharmaceutical drug approvals with foreign First World nations to cut drug prices.
Currently, one of the biggest contributors to high drug prices is the fact pharmaceutical companies have to spend years and billions of dollars getting the FDA to approve new drugs, and then have to spend similar amounts running the exact same tests to get approved by other First World regulators like the EU, Japan, Britain and others.
Instead of running the same expensive tests, the FDA could enter into reciprocal approval agreements with other global health regulators in the First World (if they share similar testing standards as America).
The agreements would have all of the signing parties agree that if one regulator approves a drug that the other health regulators would perform a quick review (1 year or less) of all the testing and safety data instead of requiring an entirely new, largely identical, testing process that was already done by a foreign medical regulator.
If the regulators are satisfied with the safety and efficacy test data, they would then approve the drug for sale in their jurisdiction. If they were not satisfied, they could order more extensive testing, or reject the drug from being sold in their area.
This should mean the vast majority of drugs will be approved, without needing to spend billions running similar tests in different countries, and cut the price of drugs globally.
4) Reduce the cost of IVF by having the FDA approve importing donor sperm and eggs from Europe from European IVF clinics that meet the highest EU medical standards.
Currently, almost no European IVF clinic is allowed by the FDA to export donor sperm and eggs to the US because it is so complicated for foreign IVF clinics to prove they meet the same medical quality standards that American IVF clinics have.
Instead, we should have the FDA automatically assume that any European IVF clinic that has a high rating by European Union medical regulators has standards that are equal to US IVF clinics.
This would reduce the cost of IVF for Americans by increasing the supply of European sperm and egg donations.
Also, since this is the third inflationary issue being caused by the FDA, perhaps Trump could turn his eminently wise, and uniquely magnanimous gaze towards clearing out the FDA of most of its employees…
5) Test if the market likes the idea of keeping Jerome Powell.
The currency markets are easily scared which makes removing Jerome Powell a risky endeavor since stocks (and inflationary pressures) respond erratically to any unusual uncertainty about the Federal Reserve.
To test if the markets like Powell, in the middle of a slow trading day Trump can say something positive (but noncommittal) about keeping Powell in his position, and see if the markets go up.
If they increase, it indicates the markets would be less unstable and more confident throughout Trump’s second term if Powell is kept in place.
6) Inform insurance companies to reduce paperwork for doctors by at least 75% or be forced to cut paperwork by government regulation.
A major problem in the US medical system is that doctors are being buried under paperwork by insurance companies to justify what they are billing insurers.
Paperwork has become so vast that many doctors are retiring early because they are spending most of their time, well into the night, filling out paperwork instead of assisting patients.
This problem could be alleviated by Trump threatening that if insurance companies do not cut the paperwork they give doctors by 75% he will force them to reduce it by government regulation and/or Congressional legislation.
The tradeoff of this policy is that unscrupulous doctors might excessively bill insurance companies more if they have less paperwork to prove their procedures are needed.
But this tradeoff is preferable to having more doctors drop out of the workforce because of excess paperwork when one considers how expensive and time consuming it is to train new doctors.
7) Adjust ethanol mandates (at least partially) so that less corn is going to gas stations and more of it is going to feed livestock.
Ethanol mandates contribute to food inflation because they divert corn away from feeding livestock in favor of gas stations (which gas engines don’t need to work, and are actually damaged over time by ethanol).
This policy change would be difficult to implement because previous Congressional attempts to eliminate the ethanol mandate were met by Iowa Representatives and Senators blocking any changes to preserve their ethanol subsidies.
To get it passed, it may be necessary to redirect some of the ethanol subsidies to subsidizing corn used as livestock feed, so that Iowa farmers don’t lose government largesse.
However, experimenting to find some way to at least partially reduce ethanol supply and redirect it to corn for livestock would be beneficial because even a small decrease in ethanol would lead to lower food prices.
At a minimum, it would be worthwhile to send out White House officials to Iowa Representatives and Senators to see if they can adjust ethanol subsidies in exchange for other, lucrative, Congressional incentives for their farmers.