As the COVID-19 pandemic rattled global supply chains, each of the two most recent presidential administrations stressed the importance of limiting America's supposed reliance on imported goods and boosting domestic supply chains. Now, a national shortage of baby formula is testing that theoryand the results don't look good for the "Made in America" crowd.
The shortage is a serious one. According to CBS News, about 40 percent of the top-selling brands are currently out of stock. And as news of the shortage spreads, fears of panic-buying that could further deplete supply lines are causing some stores and pharmacies to limit how many units consumers can buy, The New York Timesreports.
Much of the current shortage is rooted in a February recall of formula after a suspected bacterial outbreak at an Abbott Nutrition plant in Michigan. The recall affected three major brands of powdered baby formula, and the plant was subsequently closed as the Food and Drug Administration (FDA) inspected it. On Saturday, a spokesperson for Abbott told CNN that the company is working with the FDA to restore full operations.
With the Abbott plant out of commission for the time being, America's demand for baby formula has outpaced domestic supply. It's exactly the type of situation where imports would help alleviate the domestic supply crunch and make American markets more resilient.
Unfortunately, American trade policy is doing exactly the opposite right now. Tariffs and quotassome that predate the Trump and Biden administrations, but others that were worsened in recent yearsmake it burdensome and costly to import the supplies that are now desperately needed. Sometimes those imports aren't allowed at all, for reasons that have nothing to do with health and safety.
"Surely, protectionism isn't the only reason for the current formula crisis," Scott Lincicome, director of general economics and trade for the Cato Institute, a libertarian think tank, tells Reason, "but it's just-as-surely making things worse."
As Lincicome has noted on Twitter, imports of infant formula are subject to tariff-rate quotas of 17.5 percent after certain thresholds are met. As the name suggests, tariff-rate quotas are meant to be set high enough that they effectively block additional imports by making it unprofitable to pay the tariff. In a year like this one, when domestic supplies are flagging and more formula is needed, that creates a serious impediment for suppliers.
But even if importers and consumers were willing to swallow those higher costs right now, they might be prohibited from having that choice. Last year, for example, the FDA forced a recall of approximately 76,000 units of infant formula manufactured in Germany and imported into the United States. The formula wasn't a health or safety risk to babies but merely failed to meet the FDA's labeling standards. In this case, the products were banned for not informing parents that they contained less than 1 milligram of iron per 100 calories.
In a separate incident last year, Customs and Border Patrol (CBP) bragged in a press release about seizing 588 cases of baby formula that violated other FDA regulations. The seized formulas were made by HiPP and Holle brands, which are based in Germany and the Netherlands, respectively. Both are widely and legally sold in Europe and around the rest of the world.
Even when there isn't a shortage of formula in the market, consumers should be given the choice to buy perfectly safe products that are approved by regulators in Europe even if they fail to meet the FDA's standards. Now, especially, many parents would probably prefer to feed their infants formula imported from Europe instead of not having access to any formula at all. Economic protectionism and unnecessary regulation are the reasons why that's not a viable solution right now.
But rather than moving toward allowing greater trade, the U.S. has recently adopted policies making it more difficult to import infant formula. The United States-Mexico-Canada Agreement (USMCA), the rewrite of the North American Free Trade Agreement (NAFTA) championed by the Trump administration, set new limits on how much baby formula Canada could exportnot just to the United States, but anywhere else in the world too.
As the CBC reported in 2018, that provision was likely a way for the Trump administration to snipe at China, after a Chinese-based company had invested $225 million in a formula manufacturing facility in Canada. The deal was also a win for American dairy farmers and the Trump administration, the CBC reported, after a political spat between the dairy special interests on both sides of the border.
But the new "export fees" included in the USMCA likely make it more costly and difficult for America to import extra supplies of formula from its northern neighbor. Chalk it up to another self-inflicted wound of the trade war with China.
While each of these specific trade and regulatory policies has contributed to the infant formula shortage in small ways, the bigger picture should raise some difficult questions for the economic nationalists who believe that foreign trade is a vulnerability for America's economy. Sen. Josh Hawley (RMo.), for example, has suggested tightening the "Made in America" rules that already govern federal procurement to include "the entire commercial market." Using the power of the federal government to exclude even more foreign-made products, he argued in aNew York Times op-ed last year, is "critical for our national security."
But, as the situation with Abbott Nutrition demonstrates, supply shocks can originate close to home too. Thanks to strict FDA regulations and oppressive tariffs, America is already largely dependent on only domestic suppliers for infant formula: America exports far more than it imports every year.
That's exactly the situation the economic nationalist want in all industriesand we're now seeing exactly how that can go wrong. Cutting off foreign trade and protecting domestic suppliers can make a country more vulnerable to unexpected supply problems, not more resilient.
Read the original post:
America's Trade and Regulatory Policies Have Contributed to the Baby Formula Shortage - Reason
- Opinion | 100 Days of Javier Milei - The New York Times - March 27th, 2024 [March 27th, 2024]
- Robert F. Kennedy Jr. flirts with the Libertarian nomination - POLITICO - March 27th, 2024 [March 27th, 2024]
- RFK Jr. in talks to run on the Libertarian Party ticket to ease ballot challenges - Washington Examiner - March 27th, 2024 [March 27th, 2024]
- One Hundred Days of Libertarian Populism in Argentina - The American Conservative - March 27th, 2024 [March 27th, 2024]
- Bylaws and Rules Committee and Platform Committee Survey (Part One) - Libertarian Party - March 27th, 2024 [March 27th, 2024]
- When Will the Libertarian Party Have Its Moment? - Econlib - March 27th, 2024 [March 27th, 2024]
- RFK Jr. in talks to run on the Libertarian Party ticket to ease ballot challenges - Colorado Springs Gazette - March 27th, 2024 [March 27th, 2024]
- RFK Jr. aligned with the Libertarian Party on capitalism stance - NewsNation Now - March 6th, 2024 [March 6th, 2024]
- RFK Jr. fuels talk of switching to the Libertarian Party - Fox News - March 6th, 2024 [March 6th, 2024]
- RFK JR still flirting with Libertarian Party run? Third parties seek ballot access - The Hill - March 6th, 2024 [March 6th, 2024]
- RFK Jr. sparks speculation of switch to Libertarian Party for greater ballot access - Washington Examiner - March 6th, 2024 [March 6th, 2024]
- Nate Silver: Libertarians Are the Real Liberals - Reason - March 6th, 2024 [March 6th, 2024]
- Even immigration is no free lunch - Washington Examiner - March 6th, 2024 [March 6th, 2024]
- Interview with NC Libertarian governor candidate Shannon Bray - Fox Carolina - March 6th, 2024 [March 6th, 2024]
- Libertarians Call for 'Food Freedom' in Response to Amos Miller Farm Search - Lancaster Farming - March 6th, 2024 [March 6th, 2024]
- Where Does the Term Libertarian Come From Anyway? | Jeffrey A. Tucker - Foundation for Economic Education - March 6th, 2024 [March 6th, 2024]
- Here are the 10 Libertarian candidates in the 2024 NC Presidential Primary - Fox Carolina - March 6th, 2024 [March 6th, 2024]
- 2024 Presidential Primary Information: Ballots Have Other Races, See Where to Vote - Watertown News - March 6th, 2024 [March 6th, 2024]
- Argentina's libertarian President Milei warns parliament that he will govern 'with or without' political support - Le Monde - March 6th, 2024 [March 6th, 2024]
- Madison County Introduces First-Ever Libertarian Primary on Super Tuesday - BNN Breaking - March 6th, 2024 [March 6th, 2024]
- Musician and libertarian writer who works for 'The Blaze' arrested on Jan. 6 charges - NBC News - March 6th, 2024 [March 6th, 2024]
- RFK Jr. says he didn't read Alabama IVF ruling, won't say when life begins - The Washington Post - February 26th, 2024 [February 26th, 2024]
- Argentina touts libertarian social justice to Blinken before Javier Milei visits CPAC - Washington Examiner - February 26th, 2024 [February 26th, 2024]
- Robert F. Kennedy Jr.'s Delicate Dance: Navigating Reproductive Rights and Libertarian Principles - BNN Breaking - February 26th, 2024 [February 26th, 2024]
- Javier Milei and the Spanish Tradition of Liberty - Quillette - February 26th, 2024 [February 26th, 2024]
- The Weekly Wrap: Poilievre proves hes more than a live-and-let-live libertarian - The Hub - February 26th, 2024 [February 26th, 2024]
- Why have authoritarianism and libertarianism merged? A political psychologist on 'the vulnerability of the modern self' - The Conversation - January 5th, 2024 [January 5th, 2024]
- Argentina's Javier Milei what are his plans and will they work? - MoneyWeek - January 5th, 2024 [January 5th, 2024]
- Tucker Carlson Issues Scathing Indictment of 'Libertarian Economics' - Reason - December 20th, 2023 [December 20th, 2023]
- Tucker Carlson: "Libertarian Economics Was A Scam Perpetrated By The Beneficiaries Of The Economic System" - RealClearPolitics - December 20th, 2023 [December 20th, 2023]
- A Legacy of Resistance to Unjust Taxation - Libertarian Party - December 20th, 2023 [December 20th, 2023]
- The Croatian Invasion of the Micronation of Liberland - Reason - October 9th, 2023 [October 9th, 2023]
- As RFK Jr. Readies an Announcement Monday, Speculation Is ... - The New York Sun - October 9th, 2023 [October 9th, 2023]
- The libertarian think tank that helped build the 'No' case - The Saturday Paper - October 9th, 2023 [October 9th, 2023]
- Fox Chapel Area voters will choose among two candidates for District 3 school board seat - Yahoo News - October 9th, 2023 [October 9th, 2023]
- Far-right party may hold keys to next Polish government, sets tone in talks with Ukraine - Yahoo News - October 9th, 2023 [October 9th, 2023]
- Aella: Is Porn Too Pervasive? - Reason - October 9th, 2023 [October 9th, 2023]
- Massie: McCarthy Speakership Showdown a 'Referendum' on ... - Reason - October 9th, 2023 [October 9th, 2023]
- ESPN's Pablo Torre explains how Harvard classmate Vivek Ramaswamy was 'That Guy' in school - Yahoo News - October 9th, 2023 [October 9th, 2023]
- DeFi has not followed through on its privacy promises yet - Blockworks - October 9th, 2023 [October 9th, 2023]
- At 50, 'The Machinery of Freedom' Remains an Anarcho-Capitalist ... - Reason - October 9th, 2023 [October 9th, 2023]
- Building the World's First Private Libertarian City - Reason - July 13th, 2023 [July 13th, 2023]
- Libertarian candidates say they were not asked for money to run - Buenos Aires Herald - July 13th, 2023 [July 13th, 2023]
- David Schmidtz and My Dad on Asking the Right Questions - Econlib - July 13th, 2023 [July 13th, 2023]
- Indiana governor's race grows more crowded with addition of ... - The Statehouse File - July 13th, 2023 [July 13th, 2023]
- Revealed: The EU lobbying of the so-called 'Consumer Choice Center' - EUobserver - July 13th, 2023 [July 13th, 2023]
- Why do voters have to pick a Republican or a Democrat in the US? - kinyradio.com - July 13th, 2023 [July 13th, 2023]
- Review: Choose Your Own Adventure in 'American Futures' Book - Reason - July 13th, 2023 [July 13th, 2023]
- Twitter users slam Kamala Harris for airplane bathroom demand amid the ongoing border crisis: 'Really?' - Yahoo News - July 13th, 2023 [July 13th, 2023]
- Fundraisers revel in gutted N.J. pay-to-play law - POLITICO - July 13th, 2023 [July 13th, 2023]
- Utah Gov. Spencer Cox wants to spare kids from their phones - Salt Lake Tribune - July 13th, 2023 [July 13th, 2023]
- Kari Lake in Tucson: "I'm actually eyeing the Senate race" - KGUN 9 Tucson News - July 13th, 2023 [July 13th, 2023]
- Q&A with Gary Swing | Veteran minor party candidate advocates for ... - coloradopolitics.com - July 13th, 2023 [July 13th, 2023]
- Jonah Goldberg: A NeverTrumper's Take on the 2024 Election - Reason - July 13th, 2023 [July 13th, 2023]
- Gov. Lombardo one of few republicans to sign abortion protections ... - KTNV 13 Action News Las Vegas - June 2nd, 2023 [June 2nd, 2023]
- Review: 'Land and Liberty' Charts Henry George's Influence - Reason - June 2nd, 2023 [June 2nd, 2023]
- Polish ref cleared of wrongdoing, will take charge of Champions ... - TVP World - June 2nd, 2023 [June 2nd, 2023]
- The Taliban 20's McCarthy Red Line - Puck - June 2nd, 2023 [June 2nd, 2023]
- Morris: Property: Imagine it anew - Greenfield Daily Reporter - June 2nd, 2023 [June 2nd, 2023]
- Weekend Reading on Women's Representation: Stereotypes Can ... - Ms. Magazine - June 2nd, 2023 [June 2nd, 2023]
- Fox Business Shuts Down Kennedy, Will Replace With Kudlow Reruns - Yahoo Entertainment - June 2nd, 2023 [June 2nd, 2023]
- The 11th commandment | News | vcreporter.com - Ventura County Reporter - June 2nd, 2023 [June 2nd, 2023]
- The Long Afterlife of Libertarianism - The New Yorker - May 31st, 2023 [May 31st, 2023]
- Can McCarthy Pass the Debt Deal and Keep His Job? - The New York Times - May 31st, 2023 [May 31st, 2023]
- McCarthy-Biden Debt Limit Deal Clears First Hurdle in Key House ... - The New York Sun - May 31st, 2023 [May 31st, 2023]
- Libertarian Party of Wisconsin: Libertarians to voters: Let's go ... - WisPolitics.com - April 25th, 2023 [April 25th, 2023]
- How the pandemic challenged libertarianism | Canada's National ... - Canada's National Observer - April 25th, 2023 [April 25th, 2023]
- Colorado falls to 43rd in national highway ranking - The Durango Herald - April 25th, 2023 [April 25th, 2023]
- Are We Stuck In a Plutocratic Formal Organization? An Analysis of ... - Trincoll.edu - April 25th, 2023 [April 25th, 2023]
- Why Is Tucker Carlson Leaving Fox News? - Reason - April 25th, 2023 [April 25th, 2023]
- Despite SCOTUS Ruling Limiting Its Authority, EPA Tries To ... - Reason - April 25th, 2023 [April 25th, 2023]
- Biden's "freedom" pitch and the coming political realignment - The.Ink - April 25th, 2023 [April 25th, 2023]
- Informal dollar reaches AR$497, Fernndez and Massa blame ... - Buenos Aires Herald - April 25th, 2023 [April 25th, 2023]
- Crack-Up Capitalism by Quinn Slobodian review the economic anarchy of Liz Trusss dreams - The Guardian - April 25th, 2023 [April 25th, 2023]
- 2024 Libertarian Presidential Candidates - Who's Running in 2024? - March 2nd, 2023 [March 2nd, 2023]
- 5 things the Libertarian Party stands for | The Hill - February 18th, 2023 [February 18th, 2023]
- Most Libertarian States 2022 - worldpopulationreview.com - December 25th, 2022 [December 25th, 2022]
- Gun Ownership | Libertarian Party - December 25th, 2022 [December 25th, 2022]
- Libertarian Party | History, Beliefs, & Facts | Britannica - December 18th, 2022 [December 18th, 2022]
- The Education of a Libertarian | Cato Unbound - December 18th, 2022 [December 18th, 2022]