Avocados, tequila could be targets of Trump's tariffs

URUAPAN, Mexico - President-elect Donald Trump has threatened to implement significant new tariffs on Mexico, Canada, and China immediately upon taking office, and Mexicans are worried his strategy could lead to a sharp increase in prices for a wide range of products, from avocados to tequila.

Avocado growers, pickers and packers worry that U.S. consumers, if faced with 25% higher prices, may just skip the guacamole.

"I think that when there is an increase in the price for any product, demand declines," avocado grower Enrique Espinoza told The Associated Press. "It would be a tragedy if they closed down [the border] on us."

Tariffs enacted to address illegal immigration

Trump’s threat to enact tariffs is part of his strategy to address illegal immigration and drug trafficking.

Trump made the threats in a pair of posts on his Truth Social site earlier this week.

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"On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders," he wrote.

But Trump's Jan. 20 inauguration couldn't come at a worse time for avocado growers: It's around when Mexico starts shipping crates of the green fruit north for Super Bowl Sunday, the annual peak of consumption.

José Luis Arroyo Sandoval, a manager at an avocado packing house in Michoacan, also told the AP that the economy would be affected.

Picture of avocados growing on trees in an orchard in the municipality of Ario de Rosales, Michoacan State, Mexico, taken on September 21, 2023. (Credit: ALFREDO ESTRELLA/AFP via Getty Images)

"Work for us could decrease because it won't be quite so attractive to export," Arroyo said, "because avocados would get expensive, and avocados are already expensive."

Tequila and tariffs

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

That has raised cautious concern among tequila producers, including farmers who grow agave on some of the driest, marginal soils that couldn’t support many other crops.

"We are analyzing the statements by the authorities and their reactions, and in the coming days we will establish a position," the National Tequila Industry Chamber said in a statement.

And industry representatives say a drop in the consumption of tequila — America’s third-most popular spirit, behind vodka and pre-mixed cocktails — could affect U.S. bars, restaurants and clubs.

"At the end of the day, tariffs on spirits products from our neighbors to the north and south are going to hurt U.S. consumers and lead to job losses across the U.S. hospitality industry just as these businesses continue their long recovery from the pandemic," the Distilled Spirits Council of the U.S. said in a statement.

RELATED: Trump threatens to impose new tariffs on Mexico, Canada and China on 1st day in office

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

Trump speaks with Mexican president

During his campaign for presidency, Trump outlined several things that he wants to accomplish for his first day back in office, vowing to enact significant changes across key policy areas, including immigration, energy, and foreign policy.

Trump said he spoke with Mexican President Claudia Sheinbaum Pardo, saying she has agreed to "stop Migration through Mexico, and into the United States."

Sheinbaum, who recently took office, said on Wednesday that Mexico would retaliate if Trump followed through on his promise. 

"If there are U.S. tariffs, Mexico would also raise tariffs," she said during a press conference.