Foreign
U.S. consumers will face even higher costs for meat, vegetables, and fruit if President Donald Trump imposes tariffs on Canadian and Mexican imports, economists and food industry executives said.
U.S. consumers are already grappling with soaring prices for beef and eggs and have struggled with high inflation since the COVID-19 pandemic and, ironically, the same consumers voted for Trump in part due to discontent with higher prices.
Trump pledged to bring down costs for ordinary Americans.
The White House said on Friday that the new tariffs on Canada and Mexico will take effect on Feb. 1, denying a Reuters report that they would be delayed until March 1.
Tariff-related price increases would hit consumers’ wallets at a time when beef prices are near record highs and costs for eggs have climbed after bird flu eliminated millions of egg-laying hens.
Bird flu cases in dairy cows have also reduced milk output in top-producer California.
Shortly after taking office last week, Trump set the Feb. 1 deadline for imposing 25 per cent tariffs on imports from Mexico and Canada unless the countries move to halt flows of illegal immigrants and the deadly opioid fentanyl into the U.S.
He also said he would impose a 10 per cent tariff on Chinese goods over that country’s role in the fentanyl trade.
“Any increase in expenses in the form of a tariff subsequently serves as a ‘food tax’ on consumers for imported products and is not a workable solution,” National Grocers Association spokesman David Cutler said.
Tariffs are paid by importers, not exporters, who either pass on the costs to consumers or face lower profits.
The Trump administration says its planned tariffs will not cause higher prices in the U.S.
Vice President JD Vance said on Sunday, that consumer prices would start reducing, but it might not happen immediately.
Supply disruptions due to tariffs would highlight how reliant the nation has become on its neighbours to feed its population.
The United States imported 195.9 billion dollars of agricultural goods from suppliers around the world in 2023, according to U.S. Department of Agriculture and U.S. Customs data.
That included nearly 86 billion dollars from Mexico and Canada, the top two suppliers representing 44 per cent of the total.
Up to 40 per cent of fresh produce sold in U.S. food stores is imported, according to the National Grocers Association
“We import most of our fresh fruit and vegetables from Mexico and Canada so you will definitely see inflation on those products,” said Rob Fox, an economist and director of CoBank’s Knowledge Exchange.
“These are products that are not easily replaced,” he said.
“I can’t go out and plant tomatoes in Illinois in January and hope to replace them,” he added.
About two-thirds of U.S. vegetable imports and half of its fruit and nut imports come from Mexico, according to the USDA.
That includes nearly 90 per cent of its avocados, as much as 35 per cent of its orange juice, and 20 per cent of its strawberries.
Avocados from Mexico, a marketing arm of Mexico’s avocado industry, was shipping 52 to 53 million pounds of avocados each week to the U.S. in December, CEO Alvaro Luque said.
That climbs to more than 70 million pounds ahead of the U.S. Super Bowl football game which this year is on Feb. 9, he said, highlighting America’s demand.
The threat of tariffs alone can be inflationary, said David Ortega, an economist at Michigan State University.
“Food companies are scrambling to make contingency plans in terms of where they might source these products should these tariffs come into place, and that adds cost to their operations,” he said. (Reuters/NAN)
1st February, 2025.
C.E.
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