Since the new president of the United States Donald Trump, entered the White House, many people couldn’t be more thrilled about it and others feared about the things that Trump has been promising ever since he was a candidate. According to the New York Times report, Trump is planning to add a tax of 20% on every Mexican export which enters the States.
What’s the plan?
Well, first of all, it’s no secret that Trump had some plans regarding building up a wall which will affect people in general and not to mention the economy. Secondly, this will also create an unfriendly situation between the two countries.
As the White House Press Secretary stated, this decision about putting taxes on the Mexican products will only raise $10 billion per year, which will be a great compensation for the building of the wall which is expected to cost something around $8 billion and $20 billion.
However, the Mexican president is strongly against this plan stating that the Mexican nation will not allow such thing.
How will this plan affect the States?
Regardless of the reasons and the whole political story behind this plan, nobody can deny the enormous impact that such plan will have on a country. Especially on a country such the United States, where Mexican imports are of great value.
Even though the taxes may raise billions of dollars for building up the wall, we should also be aware that Mexico is the biggest exporter to the States, including fresh fruits and vegetables.
According to the USDA data from 2015, we can thank Mexico for almost 70% of the vegetable imports in the States and nearly 40% of the fruit imports. This is far the biggest import to the States of fresh products and now, this could all seem as a vague history if Trump’s plan goes through.
Both countries will suffer equally, the Mexican people will lose the greatest market in the world and American businessman in particular will lose the fresh products’ availability. Mexico can proudly say that it holds nearly 44% of the goods imported in the States.
The higher the taxes, the more expensive will be the products for the consumers and the business people. In this case, the domestic products won’t have to keep up with the competition and lower their prices, meaning that consumers and business people will increase their costs, for the same service and the profit will stay completely the same.
Aside from the fruits and vegetables, Mexico is also exporting beverages such as tequila and mescal into the States, and this will also undergo a 20% tax fee, reflecting negatively on all businesses, especially the clubs and restaurants.
Which food and beverages are expected to have bigger prices?
Since Mexico is clearly extremely important to the States and its exports to the States couldn’t be more valuable, especially since one of the most used and popular products in the States, originates and is imported from Mexico.
Yes, you’ve guess it- say your farewells to the fresh avocado! Aside from the avocado, here’s a list of goods and beverages which are expected to be more expensive after the implementation of this law:
–Avocado, nearly 100% of the Hass avocados are exported from Mexico to the States
–Tomatoes, nearly 71% of the tomatoes are exported from Mexico to the States
–Tequila, 79% of Mexican tequila enters the American market
–Beer, $1.3 billion worth of beer is exported from Mexico to the States
–Mexican Coke, even though the exact number is unknown, it is familiar that the sales are extremely big in the States.
–Sugar, around 15% of the sugar imported to the States, comes from Mexico
–Sparkling water, consumers in the State bought around $58 million worth of Topo Chico in a period of a year
Regardless of the outcome, this plan is concerning both sides and will definitely affect both sides. Mexico is already announcing to fight back or return the slap on taxes to all the American products, bought by their growing upper-middle class.
This is more than building up a wall, we are talking about separation of two nations and the effects it will have on the entire world. Trump’s haters were already expecting drastic changes such this one, but time will tell how those changes will truly affect our lives.