Avocados, tequila and more jeopardized by Trump’s tariff threats

Donald Trump’s proposed 25% tariffs on Mexican goods could drastically impact iconic products like avocados and tequila, threatening regional economies in Mexico and raising prices for U.S. consumers. With his inauguration coinciding with peak avocado exports for Super Bowl Sunday, producers in Michoacan fear reduced demand as prices soar.

Avocado grower Enrique Espinoza worries U.S. consumers might cut back on guacamole, while tequila producers, whose exports to the U.S. reached $4.6 billion in 2023, foresee potential setbacks. The Distilled Spirits Council of the U.S. warns the tariffs could harm U.S. hospitality jobs and drive up prices for consumers.

Mexico has hinted at retaliatory tariffs on U.S. goods, which could increase costs for essential imports like corn, further straining Mexican households. Economists predict the tariffs could plunge Mexico into a recession, with GDP potentially dropping by 4.4% if tariffs persist.

The ripple effect could also impact non-traditional goods like pickup trucks, 88% of which are produced in Mexico. Economy Secretary Marcelo Ebrard estimates tariffs could add $3,000 to the cost of a U.S. pickup truck, underscoring the potential for economic fallout on both sides of the border.

Source: AP News