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.
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% percent 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.
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.
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.
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.
Meanwhile, those same economists continue to sound the alarm that Trump’s overall tariffs proposals, which would also include slapping 25% duties on Canadian imports and an additional 10% levy on Chinese goods, would reignite inflation. In a new note, analysts at Goldman Sachs estimated Trump’s latest plans would cause inflation to increase by nearly 1%.
Yet the analysts also insisted Trump’s announcement appears to be more of a “negotiating tactic” rather than an avowal of action. Notably, his latest statement — at least in the case of China — proposed a tariff level lower than the one he proposed during his campaign.
Still, U.S. retailers are assuming Trump isn’t bluffing. In an interview with CNBC last week, the chief financial officer of Walmart said the big-box giant was bracing for potentially higher prices for its customers.
“We never want to raise prices,” John David Rainey said. “Our model is everyday low prices. But there probably will be cases where prices will go up for consumers.”
