Avocados, tequila and other popular Mexican products are at risk from Trump’s tariff threats

URUAPAN, Mexico (AP) — Mexicans fear Donald Trump’s threats to impose 25% tariffs could hit a wide range of famous Mexican products and endanger the economies of entire regions.

In western Mexico, no crop provides income to as many small farmers as avocados. But avocado farmers, pickers and packers fear that U.S. consumers might simply forego the guacamole given the 25% higher prices.

“I think when the price of a product increases, demand decreases,” said avocado farmer Enrique Espinoza. Orchards like this are the economic lifeblood of the western Mexican state of Michoacán. “It would be a tragedy if they closed (the border) to us,” he said.

Trump’s Jan. 20 inauguration — when he announced he would impose tariffs — couldn’t come at a worse time: It’s about the time Mexico begins shipping boxes of green fruit north for the annual Super Bowl Sunday Peak consumption.

José Luis Arroyo Sandoval, manager of an avocado packing company in Michoacan, said the economy would be affected.

“The work for us could decrease because exports will no longer be as attractive,” said Arroyo, “because avocados would become expensive, and avocados are already expensive.”

It may not just be Mexican producers who are affected; US consumers may also be crying.

Mexican business leader Gina Diez Barroso said at a news conference Tuesday that a U.S. agriculture official told her he had never had so many complaints as when the U.S. government ended import controls on Mexican avocados in 2022.

“Never in his life has he had so much chaos in his office because the Mexican avocados were stopped,” said Diez Barroso.

Espinoza agrees that consumers will likely share the pain.

“The gringos need avocados, it is a good product and I don’t think they will stop consuming it,” he said.

Rather, he is concerned about the opposite effect; If Mexico retaliates with its own tariffs, as President Claudia Sheinbaum has suggested, Mexicans will face not only a drop in income but also high prices for U.S. products such as corn, which is a staple feed for animals in Mexico.

“There are more poor people here, so it will affect us in some ways,” Espinoza said. “The United States can pay 25% more for Mexican products, but very few of us have enough money to pay 25% more for what we import from the United States.”

It’s not just the guacamole; Mexican tequila producers have enjoyed a bonanza in the U.S. market. In 2023, the United States imported $4.6 billion worth of tequila and $108 million worth of mezcal from Mexico.

This has raised cautious concerns among tequila producers, including farmers who grow agave in some of the driest, most marginal soils where many other crops cannot grow.

“We are analyzing the authorities’ statements and their responses and will determine a position in the coming days,” the National Tequila Industry Chamber said in a statement.

And industry officials say a decline in consumption of tequila – America’s third most popular spirit behind vodka and pre-made cocktails – could impact bars, restaurants and clubs across the US.

“Ultimately, tariffs on spirits products from our neighbors to the north and south will hurt U.S. consumers and lead to job losses across the U.S. hospitality industry as these companies continue their long recovery from the pandemic,” Distilled Spirits said Council of the USA in a statement.

The tariffs would likely plunge Mexico into an immediate recession. Mexican financial group Banco Base estimates in a report that for every 1% increase in the price of Mexican exports, their volume falls by 1.33%.

Assuming Americans could absorb half of the tariffs’ impact and simply pay higher prices for Mexican goods, they could still reduce their consumption by 12%, Banco Base estimated.

“This would be reflected in a 4.4% decline in gross domestic product,” the bank wrote, adding: “The decline would not only occur in 2025, but would become more severe the longer the tariffs are in place.”

And the tariffs could affect some products that aren’t considered particularly Mexican at all.

Mexico’s Economy Minister Marcelo Ebrard said Wednesday that 88 percent of all North American pickup trucks come from Mexico, although it was unclear whether he meant just parts of the trucks or their final assembly.

Ebrard claimed that 25% tariffs would mean U.S. consumers might have to pay $3,000 more per pickup.

“It’s shooting itself in the foot,” Ebrard said.

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