How Steep Tariffs From Canada And Mexico Could Affect Your Grocery Bill
Leading up to the 2024 election, President Donald Trump proposed a plan to place tariffs on incoming imports to force countries into negotiations. Beginning just after midnight on Tuesday, a 25% tariff on all goods from both Canada and Mexico, along with a 10% duty on imports from China, was scheduled to go into effect. Then on Monday, the tariffs applied to Mexico were delayed for one month after the two nations agreed to proceed with further negotiations, including a surge of Mexican National Guard troops being deployed to the border. As of now, the tariffs to Canada and China remain on schedule.
President Trump has argued that the tariffs will remain in place until concerns about illegal immigration and drug trafficking are alleviated, but the move is setting the stage for a trade war — one that American citizens are almost certain to be paying for with their grocery bills.
About one third of all U.S. imports come from the countries that Trump has targeted. The U.S. Chamber of Commerce has warned the tariffs would only upend supply chains and ultimately raise prices for American families. An estimate from James Knightley, the chief international economist at ING, predicts the impact to amount to $835 per person. Considering that Canada is the leading exporter of grain, livestock, and poultry, while Mexico is the largest supplier of produce to the U.S., grocery bills are likely to be where Americans will experience it the most — and some could be more effected than others.
Not only can you expect even larger up-charges on avocado if the tariffs are raised in the future, but don't be surprised if you're paying more for things like beer and spirits, too.
Super Bowl Sunday just got more costly
While Canada is America's leading meat supplier, a third of all of the United States' imports from Mexico are agricultural. The largest category of agricultural imports from Mexico is fresh fruits — totaling nearly 50% of the total agricultural imports from Mexico — with avocados alone comprising 6% of that. Considering the thin margins grocery stores already operate under, experts say it's unlikely that they'll be able to absorb the costs of the tariffs and will pass them on to their customers. With the Super Bowl in less than a week — an event known for being the biggest day of avocado and Mexican-imported beer consumption in the U.S. — the timing couldn't be worse. But, the effects will go far beyond that.
Record heat waves and long droughts have strained farmers across California and the Pacific NorthWest, increasing the country's reliance on agricultural imports from Mexico. Meanwhile, Trump's mass deportations have instilled fear among undocumented immigrants — a population that officials estimate to be 42% of the country's crop workers. Economists have warned that less workers could also mean less home-grown produce in the grocery aisle, which only means more reliance on agricultural imports, and, of course, more tariffs. Both Mexico's President, Claudia Sheinbaum and Canada's prime minister, Justin Trudeau, have said they are prepared to respond. Trump has also stated he plans to impose tariffs on the European Union next month, which would impact the price on everything from imported wine and cheese to olive oil.