New taxes could threaten Mexican imports

New taxes could threaten Mexican imports

PROVO, Utah – Those who enjoy eating guacamole as they watch March Madness might have to dish out more cash for the same ingredients this year. President Donald Trump’s proposed tax on imports to pay for the border wall could greatly affect Utah families and businesses.

All the ingredients to make a perfect guacamole – avocados, onions, tomatoes, and limes – come from Mexico. These items will be harder to come by if Trump imposes the 20 percent tariff on foreign imports to fund a multi-billion dollar wall on the southern border.

According to Fortune Magazine, a group of 25 companies of the American-Made Coalition signed a petition in favor of the tax. Companies like GE and Johnson and Johnson think it will provide more jobs and produce more items in-country.

Utah Food Industry President Dave Davis said otherwise. 

“You might think ‘Well if we tax goods outside the country, that’s going to mean more production inside of the country here.’ But as a simple fact of the matter, there is more demand here in the U.S than what we can actually produce,” Davis said.

He also said that the U.S. needs to get products like the banana from other countries because we cannot grow them on our own soil. As the country taxes the imports, Davis said that the price change could be pretty extensive.

“Consumers better prepare themselves for the $3 banana,” Davis said.

Although Mexico exports a lot of fruit, that is not their only item. According to the office of U.S. Trade Representative, Mexico is the second largest supplier of agricultural goods for the U.S. Over the past year, they have spent more than $4.8 billion on vegetables. 

The country spent more than $21 billion total on food products from Mexico. The leading items were fresh vegetables and fruit, wine and beer, snack foods and processed fruits and vegetables.

“It’s going to drive the cost of goods for consumers up in our supermarkets, in our retail stores,” Davis said.

Candace Larson is a busy mom of eight children and said going shopping to feed her family can be a challenge. 

“For 10 people… I just look at what’s on sale that week and try to base my meals around that,”  Larson said.

Larson also has a son who is diabetic and needs to eat healthy foods. But if the produce prices go up, “We would just maybe have to eat a lot more ramen and spaghetti and cut down on all the fresh, healthier things.”  she said.

Business owners like Jorge Fierro could also see the affects of the border tax. He owns the distribution company Rico Brand and the authentic Mexican restaurant Frida Bistro, and said he needs specific products from his home country to make his customers happy. 

“… Cactus leaves and other items are only grown in Mexico.” Fierro said.

He said he orders supplies and food products from Mexico because they always have items available year-round. The climate allows them to produce fruits and vegetables that cannot be produced in the U.S.

“It would be quite devastating without these products. We would have to raise prices and minimize portions,” Fierro said.

Each day, Fierro makes and packages his homemade Mexican cuisine and sends it off to many local markets. He said it is all due to the U.S. and Mexico’s great trading partnership. 

“We have always had the opportunity to do business with each other,” Fierro said.

But the numbers show that the benefits of this partnership are dollar signs. The U.S. spendd about $295 billion on things besides produce, like vehicles and machinery made in Mexico. In return, Mexico buys about $236 billion of products like soy beans and corn from U.S. farmers.

If the U.S. decides to tax Mexican products, Davis is afraid that “The Mexicans are going to turn around and put a tariff on U.S. goods,” he said.

Davis said that the best approach is to work with trading partners and make sure exchanges are fair.

Sydnee Gunter

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