Tariffs Could Spike Food Prices in the US

Imposing tariffs on Mexican and Canadian goods could drive up food prices for the average US shopper. This comes at a time when families are already grappling with food inflation, with grocery costs up 25% compared to pre-pandemic levels. 

After reaching agreements with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau on Feb. 3, 2025, the United States announced a pause on the 25% tariffs imposed by President Donald Trump. This move provided temporary relief to trade tensions between neighboring countries. However, analysts warn that if the tariffs are reinstated, one of the most affected groups would be US consumers, especially regarding grocery shopping.

Along with China, Mexico and Canada are the United States’ most important trading partners. In 2024, the country imported approximately US$467 billion and US$337 billion in goods from Mexico and Canada, respectively, according to the US Department of Commerce. In the agribusiness sector, Mexico is the largest supplier of fruits and vegetables to the United States, while Canada leads in grain, livestock, and poultry exports, among other products. Together, both countries accounted for nearly US$83 billion—of which US$46 billion stayed in Mexico—out of the US’ total spending of US$196 billion in agricultural goods between January and November last year, as reported by the US Department of Agriculture (USDA).

In 2024, the most significant category of Mexican agricultural imports was fresh fruit, which accounted for US$9 billion, with avocados representing US$3.1 billion. For the Super Bowl, set to take place this weekend, an estimated 110,000t of avocados were imported, equivalent to US$330.6 million in value.

In total, the US pays Mexico US$10.8 billion for fruits and US$9.6 billion for vegetables. Juan Carlos Anaya, Director General, Agricultural Markets Consulting Group (GCMA), emphasized that if the US imposes a 25% tariff on Mexican fruit and vegetable imports, prices for these products in the US market could rise by approximately 13.4%.

During the same period, the United States also imported US$3 billion worth of grains and US$3.4 billion in meat and livestock from Mexico. Other notable imports included sugar with US$3.9 billion, nuts with US$517 million, and poultry with US$29 million.

The United States is also the largest importer of Mexican beer, with purchases totaling US$5.9 billion in 2024. Additionally, it is a major consumer of distilled spirits such as tequila and mezcal, whose trade value reached US$5 billion. Chris Carey, Equity Analyst, Wells Fargo, highlighted in an interview with CNN that Constellation Brands, the company that imports Modelo and Corona, as well as Mexico’s Casa Noble tequila, could see costs rise by 16% under Trump’s proposed tariff, likely leading to a price increase of approximately 4.5%.

All these products could become even more expensive for consumers, particularly as retailers and farmers tend to operate with much lower profit margins compared to other industries. This comes at a time when rising grocery costs are already a major concern for many US families.

According to the US Bureau of Labor Statistics, between July 2023 and July 2024, food prices increased by 2.2%, reflecting a 25% rise compared to pre-pandemic levels in 2019. In 2025, overall food prices are expected to rise by another 2.2%, with a prediction range of -0.4% to 4.9%. Food-at-home prices are projected to increase by 1.3%, with a range of -2.7% to 5.5%, while food-away-from-home prices are expected to rise by 3.6%, with a range of 2.0% to 5.1%, according to USDA’s Food Price Outlook.