A new tariff on Mexican goods will impose a multi-billion dollar food tax on American consumers according to US produce importers and distributors.
The Fresh Produce Association of the Americas (FPAA) said that US consumers would pay an extra US$3bn for avocados, tomatoes, mangoes and other fruits and vegetables if Trump’s 25 per cent tariff on Mexican imports takes effect in October.
“This is a tax on healthy diets, plain and simple,” said FPAA president Lance Jungmeyer. “With the obesity epidemic, this is completely unacceptable and counterproductive in dealing with the migrant issue at hand.”
Americans consume US$12bn in Mexican fruits and vegetables a year, according to the US Department of Agriculture.
“The latest threat from the President will harm American consumers and US businesses first and foremost,” Jungmeyer said. “This takes us backwards as a country and threatens the passage of the United States-Mexico-Canada Agreement (USMCA) at a critical time in moving this agreement forward.”
Trump’s announcement last week comes on top of 17.5 per cent duties recently imposed by the Administration in Mexican tomatoes, duties which could raise prices 40 per cent to 85 per cent, according to analysis from the Arizona State University.
“This is going to be a drain on Southwest border communities, where employers have already cut jobs due to other moves by the Administration to put pressure on the border,” Jungmeyer continued.
With the first round of 5 per cent tariffs set to be imposed on 10 June, border businesses are to decide whether to take Trump’s threat seriously or wait to see if he stands down.
Guillermo Valencia of the Nogales US Customs Brokers Association and chairman of the Santa Cruz County Port Authority, said companies had little choice but to take the threat seriously.
"You just never know with him, so you have to take it as if he means it, and go from there,” he told Arizona Republic. “We think it’s serious. You’re dealing with people's livelihoods, and we wouldn’t want any president to fool around and make statements that he’s not serious about.”
Jungmeyer noted that there would be significant disruption to businesses who trade across the border. Following the dismantling of NAFTA, he pointed out that “most companies don’t have the right paperwork in place to even pay duties or tariffs”.
As it takes seven to ten days to set up payment options for businesses to pay tariffs, Jungmeyer said that companies were already beyond the threshold for being able to put the necessary procedures in place.
The FPAA is holding a seminar for its members on Monday in order to explain to companies how best to prepare for the imminent tariffs.