This round could be even more costly for U. S. agriculture and consumers.
President Donald Trump threatened on Thursday to impose tariffs on all Mexican goods as a way to force the country to end illegal immigration across the southern border. In a tweet, Trump announced that the United States will add a 5 percent tariff on the countrys imports in June, adding that the tariff «will gradually increase until the Illegal Immigration problem is remedied.»
The presidents announcement has already disrupted U. S. markets and alarmed farmers and business owners, who are still paying the price of the presidents first trade war. Now, experts predict another round could cost the economy billions of dollars and undo recent efforts to stabilize trade.
Heres what economists say these tariffs could mean for both producers and consumers of these goods.
Mexico is the U. S.s third-largest trade partner. Experts say raising costs on imports will have a direct impact on the U. S. economy and consumers, and if Mexico retaliates as anticipated, it could decimate farmers who are already struggling.
Americans shopping for produce will be the first to feel the effects, according to Chad Hart, an agriculture economist at Iowa State University. The U. S. imported $26 billion in fruits, vegetables, and other foods from Mexico last year. Now, all of those will face a 5 percent tariff, which could escalate to as much as 25 percent if Mexico doesnt meet Trumps demands. «Well likely see those prices ratchet up very quickly,» Hart says. «Especially when were talking about perishable products in a grocery store, theres not a lot of cushion in place to handle an additional 5 percent cost, so oftentimes that gets passed along to the consumer.»
The tariffs could also raise prices for auto parts and construction materials, and industry groups that rely on these materials are not happy.
