Trump effect

Donald Trump is back in office.

Personally and especially as a European – due to the complex geopolitical landscape – I look at this with a mix of preoccupation and curiosity. Now the EU should make decisive steps forward in terms of unity of intent and institutional reforms, or the challenges ahead might be difficult to overcome.

What I can say to my Democratic friends, is that in Italian politics we have seen it all. We are still here. And I am quite sure the robust American democratic system won’t be easily overturned.

In any case, the real winner of this election is an even more astute gambler, and you all know who I am talking about.

But this is not a political column, so let’s go back to food law.

Analyzing Trump’s recent campaign promises, his prior policies, and the Republican platform, here is what we can expect, with pros and cons and a bit of EU comparative perspective.

What will be in fact put into practice is still to be seen, as usual with the man…

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Continued Deregulation in Food Safety Standards

This has always been a mantra for the elected President.

• Reduced Federal Oversight: Trump’s administration is likely to continue promoting a reduced role for federal agencies in food safety, particularly the Food and Drug Administration (FDA) and the Department of Agriculture (USDA). This might involve easing compliance requirements of the Food Safety Modernization Act (FSMA), especially for smaller producers, under the rationale of reducing bureaucratic burden and lowering operational costs. Such authorities are already dramatically tight in budgets and personnel to face the titanic task of overseeing the food industry, so this could lead to more food safety incidents and more incentives to cut corners (read “food fraud“). Moreover, this could hamper the actual internal re-organization of the FDA, which is already quite troubled;
• Shift to Industry Self-Regulation: Encouraging industry-led safety standards could continue as a theme, with the Trump administration potentially promoting voluntary compliance rather than mandatory enforcement, especially in sectors where risks of contamination or foodborne illnesses are low. This could benefit industry costs but might as well lead to concerns over food safety consistency.

What above is likely to influence also topics related to food labeling and composition, like front-of-pack nutrition labeling, best before/use by dates, sodium reduction campaigns, etc.

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Expanded Focus on “America First” Agriculture and Trade Policies

• Bilateral Trade Deals and Tariffs: Trump’s administration is expected to maintain an aggressive stance on international trade, potentially negotiating new trade deals favorable to U.S. agricultural exports while imposing tariffs to protect domestic farmers. This could mean prolonged tensions with trade partners like China, impacting exports in high-stakes commodities like soybeans and pork. The promised “universal” 10% trade tariff on imports is not in my modest opinion likely to be seen, but being not an expert is hard in any case to foresee the full economic impact of such a draconian measure: on one side could reduce the import of raw materials that will be hard to replace in a short term (at similar costs), creating shortages and increasing opportunism in the supply chain, on the other side the USA are an incredibly adaptive system and the country is rich of land and resources, so it can adjust;
• Increased Agricultural Subsidies: Given the challenges in international trade, the administration may also extend support through subsidies to farmers impacted by export tariffs. This support could help farmers maintain operations despite export restrictions but may result in budgetary strains and increased dependence on government aid.

The combined effect of such measures might create short-term benefits for the agriculture sector, but it’s very dangerous in the long run. As we can easily see with the EU Common Agricultural Policy (CAP) money, agriculture that is heavily subsidized (and where subsidies are not always optimally managed, at least…) can lose competitiveness. The trade barriers might safeguard the sector for a while, but also boost this negative effect. One day you might pay this as a system.

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Relaxed Environmental Protections

• Rollbacks on Pesticide and Water Regulations: Trump may continue to prioritize agricultural flexibility by scaling back environmental protections, particularly around pesticide approvals and water resource management.
• Less Emphasis on Sustainability and Emission Controls: The administration may focus less on sustainable farming practices and more on maximizing output, allowing large agribusinesses to operate with fewer restrictions on emissions and waste management. This could reduce compliance costs for producers but may impact the environment over the long term, with fewer incentives for regenerative or climate-friendly practices.

This again is not my sector of expertise, but at the international level is well known the ambivalence of the USA vs. climate treaties and commitments. Now we are most likely to see a less ambivalent behavior.

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Biotechnology Policies

• Faster Approvals and Fewer Restrictions on GMOs: Trump’s administration would likely streamline the regulatory approval process for GMOs, NGTs, and biotechnologies in agriculture, promoting innovation to improve crop resilience and yield. There may also be more leniency in the labeling requirements for such foods/ingredients;
• Investment in Agri-Tech: Trump’s support for biotechnology could lead to increased federal funding for agricultural technology research, aimed at improving crop resilience and competitiveness in international markets.

While this may drive innovation, critics may express concerns over the speed of approvals and potential ecological impacts. I think this is where we have to be less concerned, and where, on the opposite, we might see unexpected benefits.

Both climate and innovation pace in other countries do not care about politics. They run their course. And to face future challenges we need innovation. The EU is already paying a high price for the heavy red tape we have on such topics. With the huge uncertainty that we have in the process and the lengthy approval of new ingredients technologies, all the innovative start-ups we met are targeting Asian and North American markets years before Europe. This is reducing competitiveness and consumer choice with limited benefits, considering the already very high safety guardrails for public health we have in the EU.

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In sum, the re-election of Trump could result in significant shifts in food policy, with overall a preference for a short-term view that could reward the electoral base, in particular farmers and small-medium enterprises, but with potential backlash on the food safety side and the international competitiveness of the sector.

More trade-offs will involve transparency and environmental protection, which are most likely to be sacrificed for more efficiency.

It is hard to tell in the medium/long term what will be the economic implications of such policies since the geopolitical situation might dramatically shift making an autarchic system more efficient than an open one. The trade barriers and tariffs might backfire and involve huge risks for domestic operators and competitiveness.

But in terms of innovation, we cannot exclude, on the contrary, that the regulatory landscape will unlock decisive innovation, that might balance the shortcomings above identified.