On Saturday, President Donald Trump initiated tariffs on major trading partners—Canada, China, and Mexico—citing a national emergency related to fentanyl and undocumented immigration. The tariffs, effective Tuesday, impose a 25% duty on imports from Mexico, and most goods from Canada, with energy-related items exempted at 10%, and an additional 10% on Chinese imports.
Trump's tariff strategy aims to increase revenue, balance trade, and compel negotiations. However, economists caution against adverse effects on U.S. businesses and consumers, already facing inflation challenges.
The U.S. Chamber of Commerce warned that tariffs could disrupt supply chains and elevate prices. "Consumers are going to be clearly worse off," stated Sung Won Sohn, professor of finance and economics at Loyola Marymount University. He added, "When you talk about a tariff, it's an economic war; and in war, everybody loses."
Approximately one-third of U.S. imports originate from these targeted countries, including essential goods like fruits and vegetables. Mexico and Canada are key suppliers, with Mexico being the largest provider of fruits and vegetables, and Canada leading in grain and meats.
Agricultural imports from Mexico and Canada could see price increases due to thin profit margins in grocery retail, potentially passing costs to consumers. The U.S. Department of Agriculture notes that while the U.S. exports more agricultural goods than it imports, import values have risen faster, partly due to climate change favoring Mexican growing conditions.
In 2022, the U.S. imported $46 billion in agricultural products from Mexico, including $8.3 billion in fresh vegetables and $9 billion in fresh fruits, with avocados making up $3.1 billion.
Source: CNN Business