Why you should care
America’s other trade war — with Mexico — could mean no avocados or tomatoes this summer.
Wall Street is fixated on Washington’s trade dispute with Beijing. But closer to home another skirmish could have a more immediate impact on the lives — and diets — of ordinary Americans.
Last week, the U.S. slapped fresh import tariffs on Mexico’s $2 billion tomato industry after the two countries failed to reach a deal on trade. Meanwhile, producers of avocados, lemons, bananas and berries in the country say they are experiencing long delays at the border, because so many U.S. government staff are now focused on migrant control rather than trade. Prices are rising, prompting some producers to consider bypassing the drama by routing shipments by sea.
“Every day more than $1 billion of goods cross the border and 70 percent is by land,” says Luz María de la Mora, Mexico’s undersecretary of foreign trade. “It’s obviously hurting our competitiveness … and the most worrying thing is that we don’t know how much longer it will last.”
We’ve never had anything like this.
Britton Clarke, president, Border Trade Alliance
Mexico has long been the fruit and vegetable garden of the U.S., producing almost half the amount consumed in America each year, according to data from the U.S. Department of Agriculture’s Economic Research Service. Fresh produce, which is difficult to stockpile because of its perishability, accounts for almost all of those imports. By value, 98 percent of fresh limes, 99 percent of fresh strawberries and 66 percent of fresh bell peppers entering the U.S. come from Mexico.
Tomatoes are the most obvious flashpoint. Facing pressure from the powerful Florida tomato industry and Republican politicians in the vital swing state, President Donald Trump’s government last week imposed duties of 17.5 percent on imports of Mexican tomatoes and restarted a two decades-old investigation into anti-dumping.
Academics from Arizona State University have warned that tomato prices could jump 40 percent, hitting U.S. consumers just as they start planning Fourth of July celebrations. Mexican tomatoes, often used in sandwiches and salads, are the top U.S. vegetable import from its neighbor. By contrast, tomatoes grown in Florida are largely sold to manufacturers for processing in salsa and ketchup, or to be used on burgers.
The avocado market has already seen some disruption. In April, threats to shut America’s southern border caused the price of Mexican Hass avocados to surge by a third, in what was the fruit’s biggest one-day price rise in almost a decade. The fatty variety of avocado is currently trading at $1.20 per pound, its highest price since August 2017. Mexico provided more than four of every five avocados consumed in the U.S. last year, according to the USDA.
Trump’s pledge to stem the flow of alleged illegal migrants has remained a key policy stance of his presidency, despite the U.S. Senate blocking funding for the construction of a wall along the border. As a result of staff redeployments, truckers ferrying fresh fruit and vegetables to the U.S. say they have had to wait as long as 12 hours before crossing the border.
“The wait times are extreme; nobody likes it when commerce is stopped and the U.S. consumer pays the price,” says Britton Clarke, president of the Border Trade Alliance, an organization focused on North American trade. “We’ve never had anything like this, that all of a sudden your routes are completely changed.”
The tomato harvest in Mexico’s state of Baja California, which borders California in the U.S., starts this week and looks set to add to the gridlock. Aram Hodoyan, a customs agent and president of the Tijuana Development Council, a private sector body, expects “400 to 500 trucks a day [at the border] for four months.”
Some producers are preparing contingency plans involving sea, says Pamela Pérez, CEO of Sealand in Mexico, which operates sea transport between Mexico and the U.S. for Maersk, the Danish logistics group. “They’re a lot more open to considering it … in case the situation becomes critical,” she adds.
Even though delays have eased in recent days, the cumulative effects of tariffs and the border friction should cause a ripple effect into prices, says Andy Harig, senior director for sustainability, tax and trade at the U.S. Food Marketing Institute in Washington. The impact could be felt within months, he adds, just as consumers want to tuck into summer salads and guacamole.
Shoppers in the U.S. may have no choice but to pay up, agrees Oscar Woltman, president of the Mexican Association of Protected Horticulture, the country’s largest group of growers. “As long as we have unstable politicians who decide on gut feeling how to open and close the border, then … the threat is real.”
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