Halloween, the biggest holiday for candy consumption, is just around the corner. Unfortunately, Americans stocking up on sweets for trick-or-treaters will pay extra thanks to the spine-tingling sugar program. A combination of dastardly domestic controls and terrifying tariff-rate quotas on imports dramatically increase the price of sugar in the United States relative to the rest of the world.
Frightening Figure 1:
In recent years Americans have paid more than twice the world price for sugar. Based on sugar deliveries for domestic use in 2020/21, the difference between paying the world refined sugar price of 17 cents per pound or paying the U.S. refined beet sugar price of 42.1 cents per pound is nearly $6.2 billion in higher costs for American sugar users.
As supply chain problems continue to disrupt the economy, some have suggested that the solution is to bring production back to the United States. For example, according to President Joe Biden, “We need to invest in making more of our products right here in the United States. Never again should our country and our economy be unable to make critical products we need because we don’t have access to materials to make that product.”
A more effective approach would be to remove trade barriers that reduce the ability of U.S. producers to create resilient supply chains and access critical inpus from abroad. Christine Lantinen, the owner of Maud Borup candy, recently testified: “Let me put this simply: the U.S. Sugar Program, a collection of policies written and implemented by Congress, creates supply chain shortages for businesses that need sugar to make their products. If we want to address global supply chains and small business trade challenges, this is a good place to start.”
She’s exactly right. Instead of attempting to replicate the costly sugar program in other sectors of the economy in order to repatriate supply chains, the Biden administration should drive a stake through the heart of policies that prey upon Americans looking for affordable sugar, steel, aluminum, fertilizer, and other products whose supply is restricted by unfair U.S. trade barriers.