U.S. Policy Pushes Up the Price of Cane Sugar

The U.S. government deliberately limits Americans’ access to sugar through marketing allotments and tariff-rate quotas

Letter to The WSJ. 

"Absent from “Tight Sugar Supply Is Hurdle For Trump’s Soft-Drink Goals” (Business & Finance, July 21) is mention of one of the chief culprits for the lack of cane sugar in American-made soda: the shameful U.S. sugar program.

Under this absurd policy, the U.S. government deliberately limits Americans’ access to sugar through so-called marketing allotments that restrict domestic production and tariff-rate quotas that choke off access to imports.

The result? U.S. sugar prices are typically double those of the world market.

This is the intended outcome. Constricting supply pushes up prices and sugar-industry profits—all at the expense of U.S. businesses (including soda producers) and consumers. It’s a wealth transfer perpetuated against the American people by well-connected special interests (par for the protectionist course).

To encourage sugar cane in American soda, President Trump should stop jawboning corporate executives and instead seek to rid the country of the subsidies and restrictions that make corn syrup artificially cheap and sugar cane artificially costly.

Colin Grabow

Cato Institute"