When President Trump ran for office in 2024, a large part of his platform was bringing down the cost of food.
With tariff wars, not to mention an actual war with Iran, this has proven difficult, as food prices have continued to rise. This has been nowhere truer than with the price of beef, which has risen to $6.89 a pound for ground beef. In an effort to bring down the price, the president has dropped tariffs on ground beef and has announced that foreign beef will sell for 25% lower cost. Whether this will help consumers is being debated, but what is not being debated is that ranchers are furious, many of whom have supported the president.
They argue that an influx of foreign beef will hurt an already struggling industry.
Historically speaking, this is not the first time, nor will it be the last, that presidents have tried to manipulate the market, often with mixed reviews. It is difficult to appease producers and consumers at the same time. The time we saw this most clearly was with FDR’s Agricultural Adjustment Act. Before we dive into the AAA, I want to comment on the political theory, as I have seen many compare what Trump is doing to FDR and call Trump a socialist for this change in policy. Living in cattle country, I side with the ranchers, but I must point out that what Trump is doing is not socialism or communism but is closer to true capitalism.
While removing tariffs is government intervention, it is intervention to remove intervention. Socialism generally involves government ownership or control of major parts of production. Trump is not trying to have the government buy the beef and sell it. That would be closer to what FDR did.
Instead, Trump is removing tariffs to open up a freer trade economy. In “The Wealth of Nations” (1776), the father of capitalism, Adam Smith, argued that countries benefit from free trade because people and businesses should be able to buy and sell goods where they can produce them most efficiently. He believed tariffs often interfere with this process and can make goods more expensive for consumers.
The part of Trump’s plan that is confusing is how he is going to make sure foreign beef is 25% cheaper. He has not laid out that part of his plan. If it is a requirement, then that is no longer a true free market, as prices are being set by the government and not the market, and it starts looking more like the New Deal.
The Agricultural Adjustment Act was passed in 1933 as part of Roosevelt’s New Deal. During the Great Depression, farmers were struggling because agricultural production was extremely high while demand and prices were low — the opposite of today. Farmers produced large amounts of crops and livestock, but consumers had less money to spend.
This created surpluses that pushed agricultural prices down and made it difficult for farmers to make a living.
The AAA attempted to solve this problem by reducing the amounts of agricultural products being produced.
The federal government paid farmers to reduce production of certain crops, which meant sometimes plowing under crops and slaughtering thousands of hogs and throwing away the meat. All of this was intended to decrease surpluses and raise prices.
The AAA was successful in some ways, but it also had important problems.
It did help raise farm prices, which improved the incomes of many farmers during the Great Depression. However, reducing the food supply also led to higher prices for consumers. To make up for this, the government had to find ways to put people back to work with more government programs and address welfare issues, which only made people more dependent on the government. It also hurt the government’s image because it looked cruel to throw away pork while people were actually starving. People wondered why the meat could not be distributed, but they did not understand that adding cheap or free pork to the market could hurt farmers even more and would not solve the original problem.
This was a tough decision, but ultimately one FDR felt was right.
Ultimately, comparing Trump’s beef policies with FDR’s AAA demonstrates that both conservative and liberal presidents have used government power to influence agricultural markets. The AAA tried to solve an oversupply problem by reducing production and supporting farm prices, while Trump is responding to an undersupply problem by increasing imports and attempting to lower consumer prices.
While Trump’s policy does not represent pure free-market capitalism, it does not make him a socialist either. Both presidents demonstrate the reality of the American mixed economy, where private businesses operate in a capitalist system while the government sometimes intervenes when economic conditions become severe.
The main difference is that Roosevelt prioritized protecting farmers during the Great Depression, while Trump’s current beef policy places greater emphasis on increasing supply and making beef more affordable for consumers, but at great harm to ranchers.
James Finck is a professor of American history at the University of Science and Arts of Oklahoma. He can be reached at james.finck@swoknews.com. Thanks to the Southwest Ledger and the Lawton Constitution for sharing his column.
