Mass deportations of farmworkers will shrink the agricultural labor supply, causing either unharvested crops or higher wages to attract workers, both of which raise food prices. High tariffs on imported food — about 17% on Mexican tomatoes, 50% on Brazilian beef, and 15% on French wines — further raise grocery costs. Rapid growth in artificial intelligence training is increasing electricity demand and straining the grid. Simultaneous policy actions restricting new energy sources and eliminating investment tax credits reduce supply-side capacity. The combined labor, tariff, and energy pressures are likely to raise prices for essentials and amplify inflationary pressures by mid-2026.
I'm thinking primarily of the price of essentials: food and electricity. I suspect that the price of food will go up noticeably between now and the middle of next year. The Trump administration is deporting people left and right. Many of those people are farmworkers. If you get rid of a lot of farmworkers, one of two things happens: Either vegetables rot in the fields or farmers pay more to attract employees to harvest the crop.
At the same time, Trump is imposing massive tariffs on food that we import from other countries. Trump is, for example, charging about a 17% tariff on Mexican tomatoes. He's imposing a 50% tariff on beef from Brazil. He's even imposed a 15% tariff on French wines, although, in less trying times, wine is not quite as essential as tomatoes and beef. These tariffs are foolish - we're not protecting essential American industries by raising the price of food - but that's not my point.
Couple that with a likely increase in electricity prices. Demand for energy is skyrocketing. Training artificial intelligence models requires running thousands of processors to perform complex computations for weeks or months. This massive demand for electricity is already straining the grid, and the boom in artificial intelligence is just starting. The Trump administration is simultaneously doing everything possible to strangle new sources of energy. Trump has suspended issuing permits for wind and solar projects on public land. He's eliminated investment tax credits that p
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