Friday, May 20, 2022

Renegotiate NAFTA, get baby formula shortage

America's baby formula shortage is the result of Donald Trump's cunning approach to the politics of trade. He kept his promise to renegotiate NAFTA by putting sweet deals for all his favorite corporate interest groups into NAFTA's replacement, the USMCA. The dairy farmers wanted the US baby formula market to themselves, and they got it.

Why were they so focused on baby formula? The main ingredient in baby formula is powdered milk, the unusual dairy product that lasts forever. Dairy producers have natural advantages in their local fresh milk markets since the product is perishable, but powdered milk can come from a much wider range of places and times. So they want trade restrictions to block out foreign powdered milk. (This is from Sarah Taber, a wonderful source of agriculture-related political information.)

What happens when you've restricted baby formula imports, and one of your major baby formula production plants gets contaminated? We're finding out now.