From beef and pork to avocados and tequila: Trump tariffs could raise US grocery, liquor bills

WASHINGTON – US prices may rise in 2025 for avocados, strawberries and other fresh produce, and consumers could face shortages, if US President-elect Donald Trump follows through on plans to slap tariffs on goods from Mexico and Canada, agricultural economists and industry executives said.

Mexico and Canada are by far the top two suppliers of farm products to the United States, with imports of agricultural goods valued at nearly US$86 billion (S$116 billion) in 2023, according to US Department of Agriculture (USDA) and US Customs data.

Duties on their food shipments could cause jarring financial and operational ripple effects on US supplies and highlight how reliant the nation has become on its neighbours for feeding its population, economists said.

Trump said on Nov 25 that he would sign an executive order on his first day in office in January that would

impose a 25 per cent tariff on all products

coming into the US from Mexico and Canada to curb the flow of illegal drugs and migrants into the US.

US consumers would feel impacts at grocery stores and restaurants, with items being out of stock, Mr Lance Jungmeyer, president of the Fresh Produce Association of the Americas, said on Nov 26.

“We would see fewer items in general in the produce section,” Mr Jungmeyer said. “Restaurants would have to reconfigure their menus, maybe putting in less fruits and vegetables or decreasing portions.”

About two-thirds of all US vegetable imports and half of fruit and nut imports come from Mexico, according to the USDA. That is nearly 90 per cent of its avocados, as much as 35 per cent of its orange juice, and 20 per cent of its strawberries.

Avocado exports to the US have soared 48 per cent since 2019, as consumers have increasingly put them in salads and on sandwiches. The US market accounts for about 80 per cent of Mexico’s total avocado exports, data by the USDA shows, a trade worth US$3 billion in 2023.

“It would generate an inflationary spiral,” said Mr Alfredo Ramírez, governor of Michoacan, Mexico’s main avocado-producing state.

“Demand would not fall,” he said. “What would increase are costs and prices. This would bring us an increase in inflation and direct repercussions for consumers.”

Margarita supplies could be hit, too. Imports of beer and tequila together make up nearly a quarter of Mexican imports of agricultural goods into the US in 2023.

US imports of Mexican tequila and mezcal – both used for making cocktails, such as margaritas – totalled US$4.66 billion in 2023, up 160 per cent since 2019, according to data from the Distilled Spirits Council of the United States.

“Tariffs on spirits products from our neighbours to the north and south are going to hurt US consumers and lead to job losses across the US hospitality industry just as these businesses continue their long recovery from the Covid-19 pandemic,” the group said.

The tariffs could also push prices higher for fertiliser imported from Canada at a time when farmers are paying nearly 50 per cent more for fertiliser than in 2020, said Mr Sam Kieffer, vice-president of public policy for the American Farm Bureau Federation, a farmer trade group.

“Now is not the time to send shock waves through the agricultural economy,” Mr Kieffer said.

Pig, cattle migration

Trump’s plan could also slow the migration of more than one million cows exported by Mexico across the border each year, to become part of the US beef supply.

US producers have slashed their cattle herds in recent years, pushing up beef prices. They could benefit if tariffs lead to fewer cattle and beef imports, said Mr Bill Bullard, chief executive of the Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America.

Tariffs could also further increase meat prices for US consumers, though Mr Bullard said importers and meat processors may be able to absorb some extra costs.

“We look forward to tariffs,” he said. “It will help to level the playing field for our domestic producers.”

To the north, tariffs also could disrupt shipments of beef and dairy cattle and hogs between the US and Canada, and potentially affect producers in both countries.

Canadian province Manitoba alone sends about three million piglets each year to producers in Iowa, Minnesota, South Dakota and Nebraska, where feed corn can be sourced more cheaply, according to the Canada Pork and Manitoba Pork councils.

Midwestern farmers then raise and fatten up the animals in their feeder barns, before sending them to slaughter – and the pork flows both to buyers in the US and Canada after processing.

Trump trade wars 2.0

The latest USDA projections show that the US in 2025 will likely run a deficit in agricultural trade of more than US$42 billion, driven in part by consumer interest in off-season produce and imported alcohol from Mexico.

The threat of tariffs could be a way of attaining leverage over Mexico and Canada in the lead-up to renegotiation of theUnited States-Mexico-Canada Agreement trade deal, set to be reviewed in 2026, said Mr Peter Tabor, an attorney and senior policy adviser at Holland & Knight and a former USDA trade official.

But implementation of steep tariffs over time could mean the US may be seen as an unreliable trading partner and that importers of US goods would look elsewhere to fill the void, Mr Tabor said. REUTERS