Home Consumer From Beer To Barley: How Trump’s Mexico Tariff Threat Could Affect Your...

From Beer To Barley: How Trump’s Mexico Tariff Threat Could Affect Your Wallet

https://www.vecteezy.com/photo/12987215-kharkov-ukraine-december-9-2020-bottles-of-corona-extra-beer-with-lime-slices-corona-produced-by-grupo-modelo-with-anheuser-busch-inbev-most-popular-imported-beer-in-the-us
By Mary Beth Sheridan and Valentina Muñoz Castillo

MEXICO CITY — Your favorite Mexican beer may get more expensive, if President-elect Donald Trump carries out his threat to impose tariffs on Mexico.

Trump said last week he would slap a 25 percent tariff on goods from Mexico and Canada if they didn’t stop the flow of migrants and the deadly opioid fentanyl over their borders. Such penalties would cause real pain to those countries, which are the top two U.S. trade partners.

But American consumers would be hurt, too, according to economists. Tariffs are basically a tax on foreign goods; importers probably would have to raise their prices to compensate.

Mexico makes all kinds of things the average American uses. It manufactures 88 percent of the pickups sold in America; a 25 percent tariff could add about $3,000 to the price tag of that new Ford or GM truck, Mexican Foreign Minister Marcelo Ebrard said last week. Mexico supplies around half of America’s imported fruit and two-thirds of imported vegetables, in dollar terms — tomatoes, berries, bell peppers, cucumbers.

And then there’s beer. Most of the imported beer that Americans swig is brewed in Mexico.

Faith Based Events
No one knows yet if Trump will carry through on his threat. He and Mexican President Claudia Sheinbaum had a “wonderful” conversation about migration and drugs on Wednesday, according to Trump. But they didn’t talk about the tariffs, Sheinbaum said.
What about my beer?

About 18 percent of all the beer drunk in the United States is imported, according to the Beer Institute, which represents the American beer industry. Mexico supplies roughly 4 of every 5 gallons. Last year, a Mexican beer, Modelo Especial, became the top-selling brew in the United States, in dollar terms. A 25 percent tariff could push up the price of brands such as Modelo Especial and Corona between 4 and 12 percent, according to analysts cited by Beer Marketer’s Insights, an industry newsletter. (The manufacturer of those beers, Constellation Brands, didn’t respond to emails seeking comment.)

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