FACT: The Trump administration is trying to find foreign eggs to lower prices, then immediately tax them to raise prices.

THE NUMBERS: Egg prices,* per dozen large Grade A –

* National averages, via. St. Louis Federal Reserve’s “FRED” Economic Data system.

WHAT THEY MEAN:

Quick followup to our look at public opinion on tariffs last week: A poll released by Fox News (on Friday, two days after our piece) matched the four-fathoms-underwater responses to CNN/SSRS and Reuters/IPSOS: 28% thought tariffs would be good for the economy and 53% bad. More generally, this poll finds “inflation, prices, and the cost of living” the top public concern, cited by 27% of all respondents. “Economy and jobs” is next at 16%. And those thinking of inflation this year often envision an egg.

Eggs are one of those common products, like gasoline or fresh vegetables, where very visible price hikes make people sensitive. Among the apparently sensitized is the Secretary of Agriculture, Brooke Rollins, who is cajoling South Korea and Turkey this month to sell us more eggs. Here’s a passage from Hoosier Ag Today:

“[Rollins] says USDA is also working to temporarily increase the import of eggs in order to increase the supply available for consumers. “Turkey and South Korea have both confirmed they will be increasing breaker egg imports into the U.S. …USDA continues conversations—in fact, I was on one earlier today regarding another country who’s ready to import a significant amount of eggs in the short term, but we continue to work that issue very, very aggressively—again, just for the short term, to keep getting the price of eggs down.”

Two points on this:

1. “Autarkic” economies often suffer shortages and price shocks: Economies with tight import limits, whether whole countries or individual ‘sectors’, suffer price shocks and shortages more frequently than “open” economies with more diversified sources of supply. As the U.S. infant formula crisis was the 2022/23 example, eggs are this year’s, with prices doubling since the outbreak of avian flu last spring.

The lost output is hard to replace because only a few countries can sell eggs to Americans. Policy is jointly and fiercely patrolled by USDA’s Animal and Plant Health Inspection Service, the Food and Drug Administration, and the Agricultural Marketing Service, for “high path avian influenza” and “virulent newcastle.” The three agencies, for understandable reasons, require countries hoping to sell eggs to American grocery stores to have food-safety systems comparable to that of the United States, and the individual poultry operations hatching them out to pass FDA inspection.

In principle this is correct — health and safety first; set policy through science and medicine rather than through responses to fears or price concerns. And in contrast to infant formula, where strict quotas and high tariffs make it very hard for American groceries to buy, eggs don’t have especially high import barriers. (Egg tariffs, HTS 04072100, are now 2.8 cents per dozen, or a quarter of a cent per egg.) But in practice, the regulatory gauntlet is so costly and difficult that egg trade is very small. USDA’s “Global Agricultural Trade System” database reports only two countries — Canada and Turkey — selling us any significant quantity, and even they don’t do much. (Canada shipped about 2.7 million dozen fresh eggs last year, Turkey 5.7 million dozen, and the rest of the world a few thousand dozen more.) The U.S. egg industry, by comparison, shipped about 53,000 million dozen to groceries each year, which puts imports below 1% of egg sales.

In such circumstances, as with infant formula three years ago, domestic problems bring swift consequences and they tend to last.  When last fall’s avian flu outbreak slashed U.S. production, shortages and price spikes followed immediately. So a dozen eggs now cost twice what they did last spring. Ms. Rollin’s Easter weekend egg hunt, like the Defense Department’s infant formula airlift two years ago, illustrates the effect of tough import limits even when the rationale for them is understandable.

2.  The Trump administration is trying to simultaneously lower and raise egg prices: Meanwhile, the rest of the administration is trying to make eggs cost more. As Ms. Rollins looks for ways to bring egg prices down, Mr. Trump has spent the past month hyping a plan to personally impose tariffs of 10%, 25%, or some yet-to-be-decided random level, on eggs and other products from Canada, the European Union, Mexico, China, and maybe every other country in the world.

Supposedly these tariffs, on chicken eggs and the other 11,413 additional “tariff lines,” will hit next week. Courts may well declare this plan unconstitutional: Congress, not presidents, has the power to set rates for “Taxes, Duties, Imposts, and Excises.” But if courts allow it on the basis of vaguely written statutes and precedent from case law, the new tariffs will put a heavy tax on all the eggs Ms. Rollins can find, and cancel much, or all, or “more than all” of whatever egg price relief she may achieve.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;

• Connect tariff policy to growth, work, prices, and family budgets, and living standards;

• Stand by America’s neighbors and allies;

• Offer a positive alternative.

Health and sickness:

The CDC has avian flu updates and counts of affected birds.

A perspective from the Animal and Plant Health Inspection Service.

USDA’s Food Safety Inspection Service explains egg import rules.

And the FDA’s egg standards.

Trade:

St. Louis Fed’s FRED services track egg prices.

Rollins and USDA on egg price strategy.

And egg-trade links from the Agricultural Marketing Service.

A reminder:

PPI in 2022 on the infant formula crisis.

And last:

Mr. Kennedy, the Health and Human Services Secretary, has suggested just letting avian flu spread around so that, eventually, hopefully, chicken populations gain immunity to it. Scientific American points out that encouraging the unchecked spread of disease is unwise, and new strains of flu virus rapidly replace old ones.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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