Fruits and Vegetables from Mexico Could See Higher Prices from Trump Tariffs
The U.S. imports approximately 60% of its fresh fruit and 40% of its fresh vegetables.
And among the countries of origin for those products, Mexico is the biggest contributor — meaning U.S. consumers could see higher prices for a range of grocery and produce items if President-elect Donald Trump follows through on his latest threat to impose a 25% tariff on all items brought in across the southern border.
Mexico’s Dominance in U.S. Produce Market
According to data from the University of California, Davis, Mexico is the leading foreign supplier of tomatoes, avocados, raspberries, bell peppers, and strawberries for the U.S.
Overall, Mexico made up 64% of U.S. vegetable imports and 46% of U.S. fruit and nut imports in 2021, according to the data from UC Davis. Between 2000 and 2021, the value of Mexico’s horticultural exports into the U.S. quadrupled, the university estimates.
Impact on U.S. Consumers
If Trump’s tariffs are implemented, U.S. consumers could face higher prices for their favorite fruits and vegetables, including:
- Tomatoes
- Avocados
- Raspberries
- Bell peppers
- Strawberries
Beer and Spirits Could Also Be Affected
Beer is included in those categories and a huge share of American drinkers could face higher costs too, given the popularity of Corona and Modelo, the latter of which is now the No. 1 brew in the U.S.
Mexican Advantage
Mexico’s gains as a source of U.S. food imports are the result of lower labor costs — in some cases one-fifth those of U.S. farm worker compensation — and more favorable seasonality, meaning in certain cases, the products come in fresher because they can be grown year round.
Who Will Pay the Tariffs?
Trump has insisted that countries of origin would pay the cost of any tariffs his administration seeks to impose. Yet economists say that in most instances, the importing companies — which in theory would be based in the U.S. — would bear those costs, and in many cases ultimately pass them along to their end users: U.S. consumers.
Economic Impact
Economists continue to sound the alarm that Trump’s overall tariffs proposals would reignite inflation. In a new note, analysts at Goldman Sachs estimated Trump’s latest plans would cause inflation to increase by nearly 1%.
Conclusion
The potential impact of Trump’s tariff proposals on U.S. consumers is significant, with many everyday items facing higher prices. While some economists believe Trump’s announcement is a negotiating tactic, U.S. retailers are already preparing for the worst.
Frequently Asked Questions
- What are the potential tariffs proposed by Trump?
- A 25% tariff on all items brought in across the southern border
- Who would pay the cost of these tariffs?
- Importing companies, which would ultimately pass the costs along to U.S. consumers
- How would this affect U.S. consumers?
- Many everyday items, including fruits and vegetables, could face higher prices
