The United States has shielded its sugar industry since the 1934 Jones–Costigan Act, part of the New Deal’s attempt to stabilize commodity markets during the Great Depression. The law created quotas, price supports, and marketing allotments to keep domestic sugar prices high and protect farmers from the volatility of global markets.

Those protections were later layered with tariff-rate quotas that limited cheap cane sugar imports from places like Brazil and the Caribbean. Prices stayed high but stable. For decades, this created a two-tier system: cheap global sugar for the rest of the world, and more expensive, protected sugar at home.

After World War II, the U.S. participated in the International Sugar Agreement, an effort to coordinate supply and price among producing nations. But that collapsed in 1981, flooding the world market with sugar and crashing global prices. President Ronald Reagan—who the D.C. establishment loves to pretend was a die-hard free trader rather than a more pragmatic free-market economic nationalist—responded by tightening U.S. import quotas in 1982, reinforcing domestic protections.

Critics love to point to those sugar barriers as the reason for the rise of corn syrup, but the protections had been in place for decades. If tariffs were really the problem, why didn’t Coke switch to corn syrup in 1955?

What Changed: Subsidies and Innovation

The timing matters. Coca-Cola made the switch in 1984, not in the 1930s, 1950s, or even during the sugar price spike of the 1970s. All along through those years, there were sugar alternatives available. But Coke stuck with sugar despite the high price.

What changed wasn’t sugar policy but a new combination of two forces. First and most important, we had government policy—mostly advanced by Republican presidents—that massively subsidized corn, flooding the U.S. with cheap grain. Second, a technological breakthrough that made it possible to turn that surplus corn into a sugar substitute.

In the 1960s, Japanese scientists developed the enzyme glucose isomerase, which allowed food scientists to convert cornstarch into high-fructose corn syrup (HFCS). By the mid-1970s, the process had been commercialized. HFCS was cheaper than sugar, more shelf-stable, and worked well in beverages and processed food. But what really made it irresistible was the government-engineered collapse in corn prices. …

If Trump has truly convinced Coca-Cola to return to cane sugar, he’s doing more than fixing a recipe. He’s shining a light on one of the most misunderstood economic shifts of the late 20th century.

The move to corn syrup wasn’t caused by a “Tariff Man.” It was caused by Cold War diplomacy, subsidized overproduction, and a technological leap that turned surplus grain into shelf-stable sweetener.

The free-trade crowd loves to blame tariffs for anything they can. But in this case, it wasn’t a market distorted by protectionism. It was a market engineered by the government’s abundance policy and its whipsaw Cold War policies.

You can see why this is awkward for the D.C. establishment. It was our interventionist foreign policy—first détente and then grain embargo—coupled with aggressive promotion of international trade and corn subsidies that brought about the dreaded rise of corn syrup and the exile of cane sugar. That’s not a story that is useful to their policy agenda.