As Stanislaus County farmers and consumers — along with those throughout the rest of the country — feel the sting of the ongoing trade war with China and its resulting retaliatory tariffs, more could be on the way as President Donald Trump has threatened to impose similar restrictions on Mexico amid border concerns.
The tariffs on Mexican imports, set to go into effect on Monday, will be five percent, ultimately escalating to 25 percent by October unless Mexico “substantially stops the illegal inflow of aliens coming through its territory,” the White House said. If Mexico chooses to retaliate with tariffs of their own, farmers could face further losses.
The U.S. exported $19 billion in agricultural exports to Mexico last year, making it the second-largest purchaser after Canada, according to the U.S. Department of Agriculture. Mexico is the top market for U.S. corn, rice, dairy products, poultry, eggs, pecans and also a major buyer of American beef, pork, soybeans and wheat.
Lenny Mendonca, Chief Economic and Business Advisor to Governor Gavin Newsom and Director of the State’s Office of Business and Economic Development, gave his perspective on how a potential trade war could affect California, which exports $30.7 billion in goods to Mexico and imports $44.1 billion.
“Mexico is particularly important in terms of goods and products that go both ways...mucking up that supply chain with tariffs is not a good idea, and hopefully calmer discussions will yield to the longstanding practice of having very productive and constructive relationships with our close trading partners,” Mendonca said. “Tariffs are a bad way to conduct foreign policy. It’s a tax on domestic consumers and small businesses, so I don’t think it’s helpful at all.”
As Mexico is the U.S.’ biggest source of agricultural imports, tariff impacts will be felt by those visiting the grocery store. The price of an avocado could rise about $2.20, and most of the country’s jalapenos, cucumbers, blackberries, watermelons, green onions and papayas come from Mexico.
Those shopping for cars may be hit the hardest, however; Mexico also serves as America’s biggest car and auto parts provider.
If implemented, tariffs on Mexico combined with already-imposed tariffs on China, could amount to potentially $190 billion per year in new taxes. Farmers in Stanislaus County are already struggling, and a second round of federal aid for growers — including those that tend to almonds and walnuts — was recently announced.
Stanislaus County Farm Bureau governmental affairs director Tom Orvis said that while Stanislaus County exports to nearly 100 different countries, local farmers export to some more than others — like Mexico and China.
“It can affect you when there’s large added costs to your biggest trading partners. It’s why you shouldn’t put all of your eggs in one basket...it will trickle back down to the county, and eventually to the farmers,” Orvis said.
Trump on Friday said there is a “good chance” Mexican and U.S. officials can come to an agreement that would remove the need to impose any tariff.
“In the past we’ve seen trade games, and we always seem to be on the short end of the stick,” Orvis said. “Whether we like or don’t like what [Trump] is doing, I know he’s trying to reach a little more parity...the hard part is who’s going to blink first?”