Update March 6, 2025: President Donald Trump on Thursday postponed 25% tariffs on many imports from Mexico and some imports from Canada until April 2, according to the Associated Press.
A 25% tariff on imports from Mexico and Canada is now in effect, and businesses and consumers are about to feel the impact.
On the Eastside, consumers could see price hikes on popular Mexican imports — from avocados and tomatoes sold at grocery stores to beer and tequila from your corner mini-mart to leather goods and medicine from El Mercadito.
Martin Lopez, owner of Herbs of Mexico, a longstanding herb shop in East L.A., is concerned that higher Mexican import costs will “hurt the economic fabric” of his store and the broader East L.A. community.
“Raw material will be more difficult for us to get. A majority of our products do come from Mexico, so if they’re higher in costs, we’ll have to absorb the costs or pass along the cost to the consumer,” Lopez said.
At his shop on Whittier Boulevard, Lopez sells herbal supplements, teas and other raw materials like tejocote and dried guajate, which are imported from Mexico and supplied by local distributors.
He’s worried the business model of selling mostly imported goods could become unsustainable. Even driving across the border to import items himself may not be an option.
“That’s going to cost us money. We’d have to get the insurance and the bonds and all those different things to be able to import our own product if the cost becomes prohibitive. I don’t know if I have the bandwidth to be able to do that… It’s going to be a big hit for us,” Lopez said.
Mexico is one of the U.S.’ top trading partners, along with Canada and China. It sends roughly 80% of its exports to the United States, according to data collected by the Mexican government, so higher export costs could hurt both nations’ economies, some economists warn.
Marc Muendler, economics professor at UC San Diego, says its impacts will be seen in a one-time price increase for most products imported from Canada or Mexico.
“It’ll be harder for Mexican manufacturers, probably also for farmers, to ship their goods to the United States. They will see a decline in their exports and they’ll probably see a decline in the prices of the goods that they want to ship,” Muendler said in an interview with Boyle Heights Beat.
Here’s what you need to know.
What is a tariff and how will they work?
A tariff is a tax imposed on imported goods from a foreign country. The companies that bring foreign goods into the country pay the tax to the government, which can trickle down as higher costs to consumers and business owners.
During his first term, Trump wielded tariffs as a foreign policy weapon to negotiate trade agreements with Canada, Mexico and China.
On Tuesday, the Trump administration imposed a sweeping 25% tariffs on most imported goods from Canada and Mexico, with a 10% tax on Canadian energy imports such as natural gas and oil. Additionally, an existing 10% tariff on trade from China was doubled to 20%.
Why is the Trump administration imposing tariffs on Mexico?
Trump has said he is imposing tariffs on the three countries to curb illegal immigration and prevent fentanyl, a synthetic opioid, from entering the U.S. A statement from the White House accuses the foreign nations of failing to prevent the flow of fentanyl, although experts say the reality is far more complex.
In response, Mexican President Claudia Sheinbaum has taken a more aggressive stance on managing the caravans of migrants attempting to cross the U.S.-Mexico border with military enforcement.
What items will likely see price hikes?
Some of the hardest hit Mexican industries include the automobile, agricultural and pharmaceutical sectors. Consumers could expect to see hikes while out shopping for groceries, eating out, or buying a car. [Update March 5, 2025: After meeting with executives of several automakers on Wednesday, the president said tariffs on car imports would be paused for one month to give companies like Ford and General Motors time to move production to the U.S.]
Avocados, tomatoes, cucumbers and bell peppers are some of the top Mexican fruit and vegetable imports by the United States. Cars, automobile parts, machinery and raw materials like steel and iron are also some of Mexico’s top exports to the U.S. and will likely see cost changes. Popular items like Mexican beer and tequila, will also see increased prices.
While Trump has explained that the exporters will pay the increased costs to ship items to the U.S., Muendler says it is often domestic companies or consumers who will bear the brunt of the tacked-on costs. An exact estimate of how expensive Mexican imports will be is hard to say, but Muendler is confident that the tariffs may shake up trade practices around the world.
Will gas prices go up due to tariffs?
Fuel prices could inch higher in response to a disrupted supply chain from Canadian crude oil manufacturers. Canada supplies 60% of America’s crude oil imports according to data from the U.S. Energy Information Administration. A 10% fuel markup against Canadian petroleum imports could hit parts of the Midwest harder.
And while Mexico supplies the U.S. with less than 10% of the fuel consumption domestically, a 25% tariff on Mexican crude oil may result in the U.S. looking for alternative petroleum providers to satisfy parts of the American south and southwest.
What’s next?
China announced retaliatory tariffs of up to 15% on the U.S. for a wide array of items while the president of Mexico said she would announce her plans for retaliation on Sunday, according to the Associated Press. Canadian Prime Minister Justin Trudeau said the U.S. would face tariffs on more than $100 billion worth of goods over the course of 21 days.
Muendler and the staff at UC San Diego’s Global and Prosperity Lab published a report detailing the potential consequences of increased tariffs and a potential trade war, arguing that tariffs hurt both the exporter and importer’s respective countries.
The Yale University Budget Lab suggests that the average American family could face price increases of more than $1,000 because of the tariffs.