President Trump’s administration recently mentioned one way to help “build the wall” between Mexico and the United States would be a 20 percent tax on all imports coming from Mexico to America. Today NBC26 unpacks how consumers and small grocery stores locally could be impacted by that move.
Over 70 percent of the avocados, tomatoes and tequila in the U.S. come from Mexico and if this tax goes through some economists say it’s likely going to cost all of us, including the grocery stores that buy the goods, more to bring some groceries home.
At the La Popular Supermercado grocery store in Green Bay about 75 percent of the products on the shelves come from Mexico.
"I’m trying to make my customers happy. Trying to bring (them) what they like," say Nora Grajeda the owner of the store.
Grajeda manages to make ends meet at her multicultural grocery store but like any small business, it can be grind. She says that in their first few years of business she would even drive to Chicago once a week to pick up products shipped from Mexico. By doing so she could save money that she would have had to spend on shipping expenses.
"You know I’m a single mother. I have to provide everything to my house."
The potential of a 20 percent border tax on Mexican goods scares Grajeda because she would likely have to pay more for her products and in turn charge more.
"I don't like to raise prices on my produce. I don't like that," says Grajeda.
Some economists say that prices at grocery stores would have to go up to cover their new cost margins. Kevin Quinn a professor of economics at St. Norbert College says open markets at the borders have thrived since World War II because many countries have come to an understanding that some countries can produce things for cheaper than others. But he says this potential border tax would likely cost everyone a bit more at the grocery store.
"Consumers absolutely positively would notice an increase in price on some things."
And when prices on items go up, people tend to buy less, and that's the concern for Grajeda.
"I guess I feel fear losing my business," says Grajeda.
Some economists say grocery stores feeling the effects of an import tax are just the tip of the iceberg. Adding that increased food costs would also hit the restaurant industry in unforeseen ways.
This potential Mexican import tax was only mentioned by the Trump administration at this point. Only time will tell if it becomes reality.
