Trump's tariff threat against Mexico to cost U.S. consumers, jeopardize USMCA

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Trump's tariff threat against Mexico to cost U.S. consumers, jeopardize USMCA

U.S. President Trump's surprise threat to impose escalating tariffs against Mexico could mean Americans will be paying an extra US$3 billion for avocados, tomatoes, mangos and other fruits and vegetables, warns the Fresh Produce Association of the Americas.

Trump tweeted late Thursday that he is placing a 5% tariff on all Mexican imports, effective June 10. He said he would increase those tariffs to 25%, “until the Illegal Immigration problem is remedied.”

This comes on top of 17.5% duties recently imposed by the Administration in Mexican tomatoes, duties which could raise prices 40-85%, according to an analysis from Arizona State University economists.

“The latest threat from the President will harm American consumers and U.S. businesses first and foremost,” said FPAA President Lance Jungmeyer.

Some companies in the consumer staples sector took a hit immediately on Friday, putting food and grocery sellers under significant pressure, reported TIME.

Cysco Corp., Costco and Kroger, the nation’s biggest grocery chains, all slid. Chipotle Mexican Grill Inc., which relies on avocado for many of its dishes, slipped 2%, the publication reported.

Implications for USMCA passage

The threatened tariffs against Mexico could also jeopardize the United States–Mexico–Canada Agreement (USMCA), cautioned the FPAA.

“This takes us backwards as a country and threatens USMCA passage at a critical time in moving this agreement forward,” commented Jungmeyer.

TIME quoted Hun Quach, vice president of international trade at The Retail Industry Leaders Association, explaining further.

“Threatening tariffs on Mexican imports while simultaneously seeking support in Congress for a trade deal aimed at keeping trade barriers low with Mexico is a confusing and counterproductive strategy."

Meanwhile, fruit and vegetable growers from Florida and Georgia have asked Congress to withhold votes on the USMCA. They are urging the government to pass a Marco Rubio-led bill first. This would add even more duties or tariffs on Mexican produce, noted the FPAA.

“This is going to be a drain on Southwest border communities," Jungmeyer added. He explained employers have already cut jobs due to other moves by the Administration there. This was part of the Administration's scheme "to put pressure on the border.”

“This is completely unacceptable and counterproductive in dealing with the migrant issue at hand,” he concluded.


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