President Donald Trump's threat to shut down the U.S.-Mexico border would hit American consumers - in the gut.
From the avocados on avocado toast, to the limes and tequila in margaritas, the United States is heavily reliant on Mexican imports of fruit, vegetables and alcohol to meet consumer demand.
Nearly half of all imported U.S. vegetables and 40% of imported fruit are grown in Mexico, according to the latest data from the United States Department of Agriculture.
Americans would run out of avocados in three weeks if imports from Mexico were stopped, said Steve Barnard, president and chief executive of Mission Produce, the largest distributor and grower of avocados in the world.
"You couldn't pick a worse time of year because Mexico supplies virtually 100% of the avocados in the U.S. right now. California is just starting and they have a very small crop, but they're not relevant right now and won't be for another month or so," said Barnard.
Very Likely
Trump said on Friday that there was a "very good likelihood" he would close the border this week if Mexico did not stop immigrants from reaching the United States. A complete shutdown would disrupt millions of legal border crossings in addition to asylum seekers, as well as billions of dollars in trade, about $137 billion of which is in food imports.
"When a border is closed or barriers to trade are put in place, I absolutely expect there would be an impact on consumers," said Monica Ganley, principal at Quarterra, a consultancy specialising in Latin American agricultural issues and trade.
"We're absolutely going to see higher prices. This is a very real and very relevant concern for American consumers."
The effects of a shutdown would run both ways.
Mexico is the largest importer of U.S. exports of refined fuels like diesel and gasoline, some of which moves by rail. It is unclear if rail terminals would be affected by closures.
Rising Imports
As changing palates have increased demand for fresh produce, and a greater variety of it, the United States has increasingly come to depend on Mexico to meet that need. Imports have nearly tripled since 1999. In that period, Mexico has gone from supplying less than a third of imported produce to 44% today.
In addition to avocados, the majority of imported tomatoes, cucumbers, blackberries and raspberries come from Mexico. While there are other producers of these goods globally, opening those trade channels would take time, said Ganley.
Although the share prices of U.S. supermarket chains like Walmart and Kroger did not appear affected by Friday's announcement, food companies would ultimately feel the pain.
"We would be out of business for a while," said Barnard.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
