URUAPAN, Mexico — Concerns are growing among Mexicans regarding the potential implementation of 25% tariffs by former President Donald Trump, which could adversely impact a wide range of traditional Mexican products and jeopardize regional economies.
In western Mexico, avocados are vital for many small-scale farmers. However, avocado producers, workers, and distributors fear that U.S. consumers might forgo buying guacamole if prices surge by 25%. “Typically, when prices for any product go up, demand drops,” remarked avocado grower Enrique Espinoza. His orchard is part of the economic backbone for Michoacan, a state known for its avocado production. He voiced his fears, saying, “It would be devastating if they closed down the border on us.”
Trump’s January 20 inauguration, during which he announced plans to impose tariffs, coincides with Mexico’s peak season for avocado exports, particularly ahead of Super Bowl Sunday, a significant consumption period for the fruit.
José Luis Arroyo Sandoval, a manager at an avocado packing facility in Michoacan, indicated that the local economy would likely face challenges. “Our export market could suffer because avocados would become less appealing due to higher prices, and they are already costly,” he explained.
The repercussions may not be limited to Mexican producers; U.S. consumers might also feel the impact. Mexican business leader Gina Diez Barroso stated at a recent press conference that an American agriculture official reported a surge of complaints when the U.S. government temporarily halted inspections of Mexican avocados in 2022. “He said he had never encountered such chaos in his office before,” Diez Barroso recounted.
Espinoza echoed the sentiment that consumers might share in the difficulties. “Consumers in the U.S. need avocados; they are a desirable product, and I doubt they will cease their consumption,” he noted. His greater concern lies in the potential for Mexican retaliation through tariffs, as mentioned by President Claudia Sheinbaum. He warned that Mexicans would not only see diminished incomes but also face soaring prices for U.S. goods like corn, a crucial feed resource. “The poverty level here is higher; consequently, it will affect us more. The U.S. can afford a 25% increase for Mexican goods, but few of us can manage similar hikes on imports from the United States,” Espinoza lamented.
The avocado concerns extend beyond guacamole; Mexican tequila producers have also experienced significant growth in the U.S. market, with imports reaching $4.6 billion for tequila and $108 million for mezcal in 2023. This surge has raised alarms among tequila producers, especially those who cultivate agave in challenging agricultural conditions. “We are reviewing the authorities’ statements and will establish our stance over the next few days,” said the National Tequila Industry Chamber in a recent statement.
Industry representatives caution that a decline in tequila sales — the third-most consumed spirit in America, trailing vodka and pre-mixed cocktails — could disrupt U.S. establishments like bars and restaurants. “Ultimately, tariffs on imported spirits will negatively impact American consumers and could lead to job losses in the U.S. hospitality sector, which is still recovering from pandemic-related challenges,” stated the Distilled Spirits Council of the U.S.
Experts predict that tariffs could drive Mexico into a swift recession. According to the Mexican financial firm Banco Base, for every 1% increase in export prices, the volume of exports could decrease by 1.33%. Even if American consumers were to absorb half of the tariff impact and simply pay higher prices for Mexican products, they might still reduce their consumption by around 12%, leading to an anticipated 4.4% decrease in GDP over time. The bank emphasized that this drop would not only manifest in 2025 but would worsen with an extended duration of the tariffs.
Interestingly, some items perceived as non-Mexican could also be caught in the crossfire of tariffs. Mexico’s Economy Secretary, Marcelo Ebrard, pointed out that 88% of all North American pickup trucks are produced in Mexico, although it remains unclear whether he was referring to parts or final assembly. Ebrard warned that a 25% tariff could result in an additional $3,000 expense for U.S. consumers purchasing pickup trucks, declaring, “It would be like shooting yourself in the foot.”