High import tariffs lead to baby formula shortage in US: Report

With only four major manufacturers of formula in the United States today-Mead Johnson, Abbott, Nestle, and Perrigo, some 40 percent of the nation`s baby formula has been out of stock recently, causing new mothers to hunt from store to store to feed their infants. "One reason the market is so concentrated is tariffs up to 17.5 percent on imports, which protect domestic producers from foreign competition," said The Wall Street Journal last week, citing the Donald Trump administration`s efforts to protect domestic formula producers by imposing quotas and tariffs on Canadian imports in the United States-Mexico-Canada Agreement trade deal.

"America`s baby-formula shortage illustrates how bigger government can make big business bigger, thereby limiting competition and choice," said the newspaper, noting that this is especially worth noting as Democrats push to expand entitlements and government control over the private economy.

It also illustrates that global trade has its uses, and there are costs to the faddish drive to produce everything in the United States, according to the report. "Members of both parties in Congress want to subsidize domestic production, but this can create its own supply-chain vulnerabilities," said the report, adding that "globalization nowadays may be a dirty word, but having diverse suppliers is an economic strength."

 

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