On March 4th the White House implemented a 25% tax on imports coming from Mexico and Canada, as well as an additional 10% tax on Chinese imports. While this decision could affect the price of everything from beer to meat to grains, it could have an especially big impact on our fruits and vegetables. The changes might happen sooner than we think and might change your grocery shopping experience.
In 2022 Mexico supplied America with 51% of its fruit imports, as well as 69% of fresh vegetable imports, according to the USDA. Additionally, Canada supplied America with 2% of its fruit imports and 20% of its fresh vegetable imports. Target CEO Brian Cornell shared that the brand relies primarily on Mexican produce to get through the Winter — a time when some of America’s produce isn’t in season. This includes popular options like avocados, strawberries, and bananas. With the tariffs kicking into effect this week, Cornell told CNBC that the chain might have to raise the price of its produce in the next few days. While these changes are coming, Target has no specifics to share yet as it takes time to adjust to the newly implemented tariffs.
Price changes could happen everywhere
While tariffs don’t always come with price increases, most economists believe that this set of tariffs will lead to that outcome. Businesses can choose to absorb these added costs to avoid affecting the customer, but with tariffs set at 25%, it’s unlikely that this could be the sole solution. “If there’s a 25% tariff, those prices will go up,” Cornell shared with CNBC.
These added costs won’t just be seen at large companies, but at local communities too such as at the local farmers markets. Farmers in Georgia are already seeing the cost of produce increase, for example. One vendor shared a cost sheet breakdown with reporters at WSB-TV, which showed an increase in the cost of a case of avocados from Mexico $68 to $85 to $88.
While these tariffs could mean much higher produce prices, there’s also an option for brands to raise prices by smaller margins across the board so customers don’t feel a direct hit in one area. Still, it’s too soon to tell what the exact effects and solutions will be. The bottom line is this: we don’t know exactly how much grocery prices will increase by, but we can expect the price of produce to rise sooner than we think.
