Tomatoes, avocados — and America’s favorite beer could all be affected.
The country imports 60 percent of its fresh fruit and 40 percent of its fresh vegetables.
Of those countries, Mexico is the largest — and that means Americans could soon be paying more for all sorts of groceries and produce if President-elect Donald Trump carries out his latest threat to slap a 25% tariff on everything entering the country through the southern border.
The University of California, Davis has shown that Mexico is the largest foreign supplier of tomatoes, avocados, raspberries, bell peppers and strawberries to the United States.
In 2022, Mexico accounted for 69% of the vegetable imports in the United States and 51% of the fresh fruits imports as stated by the U.S department of agriculture.
The volume of horticultural exports from Mexico to the U.S. has increased four folds in the period between 2000 and 2021.
Beer is included in those categories — and a massive portion of American drinkers could see their costs go up too, thanks to Corona and Modelo, the latter of which is now the top beer in the U.S.
Mexico’s increase as a supplier of food to the United States is due to cheaper labor — in some instances, half the wages of an American farm worker — and better climate — in some instances, the produce is fresher because it is grown all year round.
Trump has continued to argue that countries of origin would bear the brunt of any tariffs that his administration wants to impose.
But economists argue that in most cases, the importing companies which in theory should be based in the U.S.
However, the same economists have not stopped warning that Trump’s overall tariffs plans, which would also include imposing 25% on Canadian products and an extra 10% on Chinese products, would spur inflation again.
Analysts at Goldman Sachs in a new note raised their estimate of the latest inflation impact of Trump’s plans to almost 1%.
However, the analysts also argued that Trump’s announcement also seems more like a ‘bluff’ than a declaration of intent.
Most notable of them was his latest statement — at least in the case of China — was a proposed tariff level lower than he proposed during his campaign.
Nevertheless, many U.S. retailers are proceeding as if Trump is not posturing. During an interview with USATodayWorld last week, the company’s chief financial officer revealed that Walmart is preparing for the possibility of increasing its prices to consumers.
“We never want to raise prices,” John David Rainey said. The model that we have adopted is the everyday low prices. But there probably will be cases where prices will go up for the consumer.”
