Don't Let Project 2025 Repeat the Baby Formula Disaster: Mutual Recognition Would Gut Safety Standards, Not Fix Supply Chains
Project 2025 proposes permanent baby-formula tariff liberalization and mutual-recognition agreements—a plan that would lock in a race to the bottom on safety standards and repeat the 2022 shortage's failures. The real lesson of the formula crisis is that regulatory concentration, not tariffs alone, created the single-point-of-failure. Separately, the CFPB freeze and recidivist-list rollback (already in motion) are distinct threats. This frame focuses on the trade proposal; a separate entry will cover the CFPB actions.
Project 2025's trade chapter holds up the 2022 baby formula shortage as proof that 'protectionism' is the enemy. The diagnosis is half-right: tariffs averaging 17 percent and FDA labeling quirks did concentrate 98 percent of the market in just four firms, creating a single-point-of-failure crisis when a Michigan plant was contaminated. But the cure Project 2025 prescribes—permanent tariff liberalization and mutual recognition with the EU, UK, Japan, South Korea, Australia, and others—ignores the real lesson: the shortage was a market-and-regulatory failure, not just a tariff problem. The temporary Formula Act (H.R. 7790) that eased those barriers expired in December 2022, and the market immediately re-concentrated. Permanent mutual recognition would lock in a race to the bottom on safety standards, not create competitive resilience. Separately, the administration has frozen the CFPB—the agency that catches corporate abuse when regulators check out—and is rolling back the recidivist list. These are distinct threats: one is a trade deregulation proposal not yet enacted; the other is an executive action already stripping consumer protections. Both harm families, but conflating them weakens the argument.
The humanitarian alternative
Instead of mutual recognition that lowers the safety floor, Congress should pass a permanent, streamlined version of the Formula Act that includes transitional tariff relief *and* FDA harmonization with Codex Alimentarius standards—without eliminating domestic labeling or nutritional requirements. The CFPB enforcement freeze should be immediately rescinded, and the recidivist-list rule should be expanded to cover all financial firms, not just nonbanks. A bipartisan Supply Chain Resilience Office, housed at the Treasury Department, should monitor critical goods markets like baby formula and recommend targeted anti-concentration actions.
Rollback path — how this gets undone
This action has already been implemented. These are the concrete levers that could reverse it.
- Rescind acting CFPB director's operational freeze order New CFPB director issues order restoring enforcement, consumer complaint intake, and full agency staffing; effective immediately upon Senate confirmation.
Original source — excerpted
project2025 Project 2025 ch. 27: Financial Regulatory Agencies (pp 840-841)"— 807 — Trade Supply Chain Lessons from the Baby Formula Debacle. Protectionism builds weaknesses into supply chains. This was demonstrated vividly by the baby formula shortage, which may have peaked in 2022 but remains an ongoing concern. Domestic baby formula producers benefit from a decades-old tariff that averages 17 percent, which is effectively high enough to shut imports out of the market. As if tariffs were not enough, other requirements also help to keep competition out of the market: ever-evolving labeling requirements and nutritional standards that (conveniently for domestic manufacturers) are always just slightly different from international standards. As a result, before the formula shortage in 2022, approx- imately 98 percent of the country’s baby formula was produced domestically. With foreign competition out of the way, other government policies helped to concentrate almost the entire domestic formula industry into four firms. Roughly 40 percent of baby formula purchases are made by state-level food assistance pro- grams, which typically do not let families choose their own formula brands. Instead they must buy from a single producer, which guarantees p…"