Why MAGA Wants to Make Mexican Coke in the US

(Bloomberg view) -Coca-Cola, this autumn, rather than high fructose corn syrup, a new product with reed sugar is released and at least one restaurant chain is planning to offer sugar arm as soon as possible. This news, the Secretary of Health and Human Services Robert F. Kennedy Jr.

This new coke is likely to make America healthy again. However, the US Soda manufacturers in the first place to the Egyptian -based sweetener how the question of how heavily trusted the question. The answer is protectionism, one of the main items to make America’s agenda wonderful. As it is understood, when you combine Maha and Maga, what you get… Mexico Kola.

Sugar-based Coca-Cola is already available in the United States-only imported from Mexico and is known as “Mexico Kola ında in the spoken language. The company is doing this because the United States has comprehensive trade guards for American sugar breeders, which pushes domestic sugar in the United States well above the world level in the US. This means that the use of corn -based sweeteners in US -based soda production while importing sugar soda from Mexico is more economical.

Kennedy believes that the prevalence of high fructose corn syrup in the American diet has a significant harmful effect on the health of Americans. My more knowledgeable colleagues, I doubt that this claim can judge. My concern is the distortion effect of America’s sugar policy on global trade flows and allocation of natural resources.

Converting mornia into sugar is an inefficient process compared to converting sugar cane into sugar, so using HFCs is significantly more intense than using normal sugar. The blocking of sugar cane to encourage HFCs, therefore encourages global forests in margin and raises the local price of food and land for Americans. These are small effects in the big scheme of things – meat and especially cattle have the greatest land effects of any economic sector – but they are something.

The cornerstone of US sugar policy is a tariff ratio quotas system. Under the so -called TRQ system, a limited amount of sugar can be imported to the US and slightly taxed. These quotas were established both on a national basis and in dozens of sugar. Any sugar above the quota level is taxed at least 15 cents per pound – and the price of global sugar is only about 16 cents per pound, this is a great tax.

In the meantime, these TRQs are just part of a larger plan to prevent domestic sugar prices from being very low and that provides profit to domestic sugar farmers. For example, the US Department of Agriculture is the application of providing guaranteed loans to sugar producers and the sugar itself is presented as collateral. The USDA is later instructed to manage a general allocation amount (OAQ) – a general allocation amount designed to ensure that the collateral is good for loans and avoids credit losses.

As a result, a decrease in a small number of American sugar farmers; A modest support for America’s Egyptian farmers; Higher prices for American consumers; And economic losses for America’s trade partners in Latin America.

This set of policy dates back to the 1980s and has nothing to do with President Donald Trump. However, this has a path test of some Maganomics principles in the real world and emphasizes how the self -eaten protectionism can be. Not only American sugar policy increases costs and thus lowering living standards for the majority of people. The US undermins production, because sugar is used as an input for other transactions.

Yes, naively, the prevention of sugar imports seems to improve the US trade balance. However, the actual effect cannot be known. If tropical sugar -producing countries were allowed to export more sugar, they would have higher income. These revenues will probably be spent on things that are probably the US exported – aircraft, turbines, medical devices, beef, and something else. There would be real losses for some Americans, especially for those who have sugar plantations, but it is a negative total bargaining that hurts most people on both sides of the trade relationship.

In the meantime, since all this sugar protection is a general economic policy, the relationship with public health is not at the limit.

Kola will not change consumer behavior to produce a reed sugar soda to earn propaganda for beginners in Trump. Sodas flavored with Kastar sugar are commonly available in the USA, not only competitors, but also in the USA. They are less popular because they are more expensive.

Even if consumers make transition, there is no real evidence that reed sugar is healthier than HFCs. For example, Mexico, where non -HFCS soda is the main current, has recently exceeded the United States to the rate of obesity. The reason why HFCS is bad for you is not that it is not worse for you than the reed sugar – the development of HFCS technology has made it cheaper to add sweetener to all things. And even though most people love sweet things, all this sweetened hyper -eclipse food and drink encourages excessive consumption.

A serious conversation about what to do to do about it. However, it does not solve anything to stack the policies that are scientifically illiterately to economically illiterate policies.

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This column reflects the author’s personal views and does not reflect the opinion of the Editorial Board or Bloomberg LP and owners.

Matthew Yglesias is a columnist for the Bloomberg view. VOX’s founding partner and former columnist writes slowly boring blogs and bulletins. He is the author of “a billion Americans ..

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