From beer to barley: How Trump’s Mexico tariff threat could affect your wallet
Donald Trump’s threat to hit Mexico with tariffs could raise prices on a surprising number of foods and drinks Americans love — from beer to berries to broccoli.
But American consumers would be hurt, too, according to economists. Tariffs are basically a tax on foreign goods; importers probably would have to raise their prices to compensate.
Mexico makes all kinds of things the average American uses. It manufactures 88 percent of the pickups sold in America; a 25 percent tariff could add about $3,000 to the price tag of that new Ford or GM truck, Mexican Foreign Minister Marcelo Ebrard said last week. Mexico supplies around half of America’s imported fruit and two-thirds of imported vegetables, in dollar terms — tomatoes, berries, bell peppers, cucumbers.
And then there’s beer. Most of the imported beer that Americans swig is brewed in Mexico.
No one knows yet if Trump will carry through on his threat. He and Mexican President Claudia Sheinbaum had a “wonderful” conversation about migration and drugs on Wednesday, according to Trump. But they didn’t talk about the tariffs, Sheinbaum said.
What about my beer?
About 18 percent of all the beer drunk in the United States is imported, according to the Beer Institute, which represents the American beer industry. Mexico supplies roughly 4 of every 5 gallons. Last year, a Mexican beer, Modelo Especial, became the top-selling brew in the United States, in dollar terms. A 25 percent tariff could push up the price of brands such as Modelo Especial and Corona between 4 and 12 percent, according to analysts cited by Beer Marketer’s Insights, an industry newsletter. (The manufacturer of those beers, Constellation Brands, didn’t respond to emails seeking comment.)
That Mexican beer is actually kind of American
Here’s the thing about U.S.-Mexico trade: The countries increasingly produce things together, thanks in part to the North American free-trade treaty.
Take that Mexican beer. It might be made with barley from Idaho, Montana or North Dakota. Mexico doesn’t produce enough of its own barley for its booming cerveza industry. American farmers have happily watched their total exports of malted barley (one of the main ingredients in beer) roughly triple since 2000, to 318,673 tons last year. A whopping 97 percent of that went to Mexico. If Mexican beer in the United States becomes pricier — and sells less — that could wind up hitting barley producers.
What your favorite Mexican beer says about U.S.-Mexico economic ties
That Corona or Modelo Especial might evoke the gentle waves of Cancún’s beaches, the taquerias in Ensenada, the sunsets in Tulum … but guess what? The breweries in Mexico that produce those popular beers are owned by a New York-based firm, Constellation Brands. So far, the company doesn’t sound nervous about import penalties. It’s said that it did just fine during Trump’s first term, when he threatened Mexico with wide-ranging tariffs — but didn’t impose them.
Jim Sabia, executive vice president of Constellation, told a recent conference sponsored by Beer Marketer’s Insights that it’s ready to do “everything we did” back then to fight tariffs, including working “very closely” with Mexican authorities and lobbying in Washington to emphasize the measure’s potential impact on the U.S. economy, the trade publication reported.
Constellation would be the “most affected company” by U.S. tariffs on Mexican beers, said Benj Steinman, the trade publication’s editor. The other firm that could suffer is Netherlands-based Heineken, which supplies Americans with brands including Tecate and Dos Equis.
Hold my beer (and berries, tomatoes, avocados ...)
Beer is just one of the many foods and beverages that Mexico puts on American kitchen tables. This country supplies about half the fresh fruit and more than 65 percent of vegetables imported by the United States, according to the U.S. Department of Agriculture. One reason trade has grown so much is that Mexico has a longer growing season than its northern neighbor.
Many big U.S. fruit and vegetable companies source part of their production in Mexico. Consumers may see the same packaging on their berries year-round, but what’s inside the container is constantly shifting, depending on which location is harvesting at the moment.
“Some months your strawberries are from Florida, some months from California, some months they’re coming from Mexico,” said Darcy Kochis, executive director of the North American Raspberry & Blackberry Association. She said it was too soon to predict how Trump’s tariffs might affect prices.
From cars to beer, North America’s economies are deeply interlinked
Of course, trade between the United States, Mexico and Canada goes well beyond food and drink. Canada is the top supplier of crude oil to its neighbor and also sends cars, machinery, lumber and cement over the border. Mexico provides Americans with automobiles, refrigerators, and parts for cars, computers, airplanes and medical devices — you name it.
U.S. trade with Mexico has flourished since the North American Free Trade Agreement (NAFTA) took effect in 1994. In 2020, it was replaced by the United States-Mexico-Canada Agreement (USMCA), which updated the pact for the digital age and strengthened labor protections. Trump negotiated that treaty and called it “the best and most important trade deal ever made by the USA.” But his proposed tariffs on Mexico and Canada could destroy it.
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