The 20th of January marks the day that Donald Trump will begin his second term as president of the United States. Prior to this date Trump, who is known for his outspokenness, has issued a variety of pledges and threats. A prime example is the intention of imposing an import tax of 25% for products imported made in Mexico as well as Canada. The measure will remain in effect until both countries are able to take action against fentanyl-related trafficking, and also reduce the number of asylum seekers who come towards the US. These new rules have generated considerable controversy, even though Mexican exporters are taking a cautious approach in the present. “It’s a delicate subject that’s why people do not want to make too many assumptions on the matter. So do I. the fact is that I think it’s the perfect chance to Mexico to look at different markets” says Rodolfo Méza from Aztec Fruits, a Mexican exporter group that has a sales and marketing center in Leuven.

Aztec Fruits primarily focuses on exporting Mexican fruits into Europe. European market. “So it could be an ideal time for Mexican producers to lessen their dependence upon their reliance on the United States and spread their risks by looking at other market. Naturally it is true that there is no doubt that the United States is Mexico’s direct neighbour and, therefore, it is its largest trading partner. However, Mexican fruits and vegetables aren’t widely distributed within Europe. Since a few years we’ve enjoyed a straight shipping route that connects Mexico to Antwerp and is untapped. Furthermore, if exporting into the US increases the cost of Mexican goods, we could be competing in Europe for similar products and are usually procured through South American countries.”

“We have to consider the long-term,” Rodolfo continued. “Of course, there is nothing that has been formulated at this point. It’s no secret that Trump occasionally makes announcements aren’t able to follow up on. However, Mexico may need to decide on the matter in its own control. As time goes on, Europe even with its longer travel times, might become a more lucrative market for Mexican mangoes, avocados and other goods over the US. This is a great moment to consider prioritizing our own production, and I think there are many Mexican producers are beginning to look at this in a positive light.”

The import duty could hit US consumers.

But, there is no guarantee what the impact of the proposed tax is actually applied. First of all, it could be in violation of the United States-Mexico-Canada agreement (USMCA). Additionally, Canada and Mexico, that heavily rely on trade agreements with the US and Mexico, are likely to respond by imposing measures to counter. Trump had previously proposed similar tariffs in 2019, but eventually backed off. “I believe that the US will be shooting themselves on the head in the event of this happening. I recently read that about 80percent of avocados that the US imports are from Mexico. American consumers aren’t going to quit eating avocados. It’s a well-established element of their diets that it’s a fact.”

“With the import tax, avocados will or could be priced higher due to the fact that Mexican producers aren’t likely to reduce their prices or, the US would have to purchase avocados from countries such as Colombia as well as Peru. However, this is a lot easier said than done, as those countries already have markets, and will likely require greater prices should the US abruptly switches to these countries. The bottom line is that such tax will primarily affect American customers, and the same is the case for the many other vegetables and fruits which the US is dependent on Mexico to procure. At the end of the day, we’ll be waiting to look forward to. In the end, US and Mexico have a close relationship that is why measures such as those would be detrimental to both. There is no reason to think that people would like this. But, it might be a signal to Mexican producers to look at an European market. What do you think? The logistical red carpet for Europe has been rolled out.”

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Rodolfo Meza

Aztec Fruits

Tel: +32 456 18 4982

[email protected]

www.aztecfruits.com