Possible Price Increases If There is a Tariff on Mexican Imports to USA

FROM SPECIALTY FOOD NEWS

White House Press Secretary Sean Spicer “said the 20 percent tax on annual Mexican imports would raise $10 billion a year and would easily pay for a border wall that is estimated to cost between $8 billion and $20 billion.” That’s apparently Trump’s plan to “get Mexico to pay for the wall,” something President Enrique Peña Nieto has repeatedly stated his country will not do. (Spicer later hedged on that statement, telling NBC correspondent Peter Alexander the 20 percent tax was not an official policy proposal, but instead a way to “say here’s a way in which the wall can be paid for extremely easy.”)

But such a tax could have far-reaching implications for Mexico’s farmers and economy, as well as American consumers and businesses — particularly, restaurants. According to the U.S. Department of Agriculture, Mexico is the biggest exporter of fresh produce to the U.S. by far, responsible for nearly 70 percent of our vegetable imports and almost 40 percent of fruit imports. (USDA data from 2015 places the number at 44 percent of all U.S. fruit and vegetable imports.) The U.S. also imports countless other food and beverage products from its neighbor to the south, including, of course, tequila and mezcal. Higher import prices translate to more expensive goods for consumers and businesses — and if Mexican products are more expensive, domestic producers won’t have to lower their own prices to compete.

Here are all the foods and beverages you can expect to pay more for if this tax is actually imposed:

• 93 percent of Hass avocados sold in the U.S. come from Mexico [Hass Avocado Board, 2017]

• Currently, the U.S. imports 78 percent of Mexico’s avocado production [USAID, 2014]

• 71 percent of tomatoes sold in the U.S. come from Mexico [USDA, 2016]

• The U.S. imported over $1.3 billion worth of beer from Mexico last year [Statista, 2016]

• The U.S. imports about 79 percent of Mexico’s total annual exports of tequila [Tequila Regulatory Council, 2014]

• 15 percent of all sugar consumed in the U.S. comes from Mexico [USDA, 2017]

• U.S. consumers bought $58 million worth of trendy Mexican sparkling water Topo Chico between June 2015 and June 2016 [iRI, 2016]

• Mexican Coke enjoyed “double-digit growth” in U.S. sales between 2012 and 2014, although a spokesperson declined to give exact sales numbers to the New York Times. Could the Mexican Coke boom of the mid-2010s be coming to an end? [NYT, 2014]

Should the tax come to fruition, Mexico could retaliate with tariffs of its own: As Salon reported last week, “In a trade war with Trump, Mexico would likely slap taxes almost immediately on many of the American products purchased by its growing upper-middle class,” including, of course, U.S. produce and other agricultural products.