President Donald Trump’s plan to impose a 25% tariff on imports from Mexico and Canada could hit American consumers where it hurts: in their wallets at the supermarket checkout line. The two countries are the largest suppliers of agricultural products to the US, accounting for nearly half of the $196 billion in food imported last year.
If the tariffs take effect, shoppers can expect to pay more for a wide range of grocery staples sourced heavily from America’s neighbors.
Produce:
- Mexico is the largest supplier of fruits to the US, exporting $10.8B worth in the given period. This is more than three times the value of fruit imports from the next largest supplier, Chile, at $2.3B.
- For vegetables, Mexico is again the dominant supplier, with $9.6B in exports to the US. Canada is the second largest source at $5B, followed by Italy, China, and Peru.
Meat and Dairy:
- Canada is the top exporter of livestock and meats to the US at $6.4B, significantly higher than the next largest suppliers, Australia ($3.9B) and Mexico ($3.4B).
- Canada is also the leading exporter of dairy products to the US at $500M, ahead of other major suppliers like France, Italy, and New Zealand.
- While Mexico is not in the top 5 for dairy, it is the second largest poultry exporter to the US at $29M, behind Canada’s $692M.
Grocery stores and food brands operate on thin profit margins and will likely pass on the higher costs from the tariffs to consumers.
“Any increase in expenses in the form of a tariff subsequently serves as a ‘food tax’ on consumers for imported products,” David Cutler, a spokesman for the National Grocers Association, told Reuters. He noted up to 40% of fresh produce sold in supermarkets is imported.
The tariffs could exacerbate existing price pain points for certain items. Drought has reduced the US cattle herd to its lowest level in decades, pushing retail beef prices near record highs. An outbreak of avian flu wiped out millions of egg-laying hens, causing egg prices to spike 60% in 2022. Tariffs would drive costs up even further.
Critics argue the duties will harm American families without effectively addressing the issues of illegal immigration and drug trafficking cited by Trump. Working-class consumers will then bear the brunt of these tariffs at a time when many are living paycheck to paycheck.
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