After the White House on Thursday floated the possibility of a 20-percent tax on imports from Mexico, the Internet went into hysteria over what that meant for avocado prices and availability.
It makes sense. Experts say 85 percent of America’s supply of avocados comes from Mexico, with the remaining bounty being grown in California.
It’s still way too soon to know whether President Donald Trump would, in fact, impose a tax for Mexico imports to pay for a southern border wall.
But many consumers and local growers, like Bob Lucy of Fallbrook’s Del Ray Avocado Company, are watching any developments with rapt attention.
He said if Mexican avocados become more expensive with an import tax, local growers could reap the rewards and take over more of the market.
“If someone is being penalized, somebody is usually being rewarded in the supply curve – the supply and demand curve,” he said.
Last winter, local growers sold avocados for about 60 cents a pound as Mexico had overharvested its crops.
But by October, with supply south of the border dwindling and an ensuing labor dispute, local growers were able to sell avocados for $2 a pound.
While that could be a boon for local growers, American buyers of avocados could see the expensive effects.
A report by CNN Money shows that imposing an import tax would likely result in those incoming goods becoming more expensive.
"The notion that a 20 percent tariff is a way of forcing Mexico to pay for the wall, it's just a falsehood. It's a way of forcing American consumers to pay for the wall," Edward Alden, a trade expert at the Council on Foreign Relations, told CNN.