President-elect Donald Trump’s plans to institute across-the-board tariffs and mass deportation of undocumented immigrants will likely usher in the unintended consequence of “soaring inflation,” according to a Noble Prize-winning economist, who added that grocery and housing prices will specifically be affected.
American consumers feeling the grocery store pinch are not likely to see any relief if Trump follows through on his threats of deporting en masse immigrants, a group that New York Times columnist Paul Krugman added make up a large segment of the agricultural workforce.
“If these workers are deported, the food industry will probably have great difficulty replacing them,” Krugman wrote Monday, noting that undocumented immigrants also play a major part in food processing. “Even in the best case, the industry will have to offer much higher wages — and, of course, these higher wages will be passed on in higher prices.”
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The longtime columnist continued his bleak assessment of the “downstream economic effects” of two of Trump’s major campaign pledges – sweeping tariffs and mass deportations – by writing that housing would also take a hit.
“What will Trump do if inflation rises? Bear in mind that his campaign was replete with false claims — about immigration, jobs, inflation, crime and more. And one of his go-to tactics for dismissing data that shows his claims are false is to insist that the data is fake,” Krugman wrote.
He added that consumers shouldn't expect Trump to acknowledge the “inflationary consequences” of his policies, noting that it’s “far likelier" that the former president will “deny reality or blame bad actors and try to order prices back down again.”
Krugman concluded by writing that while his concern about the threat Trump poses to democracy is greater than inflation worries, the nation’s future will depend greatly on how Americans, including those who voted for Trump, will react “if they come to find that they bought into a false belief in Trump’s ability to manage the economy.”