Don't Be Surprised if You're Paying More for Strawberries Soon

If you go to the supermarket with any frequency, and you purchase produce while there, it is hard not to notice that Mexico is where most of the berries, tomatoes, green onions and avocados come from. According to the AP's "Mexicans Launch Friendly Defensive to Deflect US Tariffs,"

Mexico overtook Canada to become the top trade partner for the U.S. in April.

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Mexico is the top export market for U.S. corn and pork, and Mexico supplies one out of three fresh fruits and vegetables consumed in the United States. Tariffs on Mexican agricultural exports are seen raising the cost of avocados, tomatoes and berries for U.S. consumers.

Beginning next Monday, Trump has threatened to increase import tariffs by 5% on all goods coming from Mexico. Those tariffs will increase 5% every month, topping off at 25% in October, or until Trump is satisfied that the Mexico government has addressed the White House's concerns over illegal immigration.

A high-level delegation of Mexican officials is in Washington today to meet with counterparts in the Trump administration. Mexican president Andrés Manuel López Obrador (AMLO) has responded to Trump's threats by calling for amity and good faith.

It's hard to say exactly what the Trump administration's goals are here because it hasn't defined what sort of illegal immigration reduction it is looking for. Mexico freezing its border with Guatemala has been mentioned, as has Mexico signing a "Safe Third Country" agreement, "which would designate Mexico as an adequate waiting spot for migrants wishing to claim asylum in the U.S." (What Turkey does for the EU.)

AMLO has problems of his own without being drawn into a trade war with the U.S. behemoth. He has powerful allies though in the U.S. Chamber of Commerce and U.S. Congress. Mexico not only feeds the United States, it is a key part of the American industrial supply chain.

On the other hand, Trump has a way of getting what he wants. Don't be surprised if you're paying more for strawberries in July.