After reading this post, I think I’m becoming convinced that we need more tariffs on infant formula specifically.
The US is a very large market; if such a giant market has consolidated enough so that a disruption in a single plant causes shortages, then we’re talking about a natural monopoly (perhaps caused by regulation of infant formula, but most of those regulations seem unlikely to go away and may even be desirable).
If there is a natural monopoly in formula production, then increasing the size of the market from “US” to “global” will only decrease the number of formula producers. Then the next crisis will be worse: a shutdown in a single plant would cause a global formula shortage.
I’m all for temporarily lifting the import bans. It is sad that this has not happened faster. But the idea that tariffs caused the market consolidation in the first place seems exactly backwards to me. If there were no tariffs to begin with, we’d be in the same situation, just with a global shortage instead.
Also, you make a good case that formula is important, to the level where producing it domestically seems like a national security issue. This is a classic use case for tariffs.
After reading this post, I think I’m becoming convinced that we need more tariffs on infant formula specifically.
The US is a very large market; if such a giant market has consolidated enough so that a disruption in a single plant causes shortages, then we’re talking about a natural monopoly (perhaps caused by regulation of infant formula, but most of those regulations seem unlikely to go away and may even be desirable).
If there is a natural monopoly in formula production, then increasing the size of the market from “US” to “global” will only decrease the number of formula producers. Then the next crisis will be worse: a shutdown in a single plant would cause a global formula shortage.
I’m all for temporarily lifting the import bans. It is sad that this has not happened faster. But the idea that tariffs caused the market consolidation in the first place seems exactly backwards to me. If there were no tariffs to begin with, we’d be in the same situation, just with a global shortage instead.
Also, you make a good case that formula is important, to the level where producing it domestically seems like a national security issue. This is a classic use case for tariffs.