5 Goods We Buy From Mexico That Will Be Affected By Trump's Proposed Tariffs

With the 2023 presidential election wrapped up and a winner chosen, Americans have started to look toward the policy objectives championed by the incoming administration during the campaign. Donald Trump is returning to the White House with plenty of talk surrounding these policy objectives, chief among them his assertion that tariffs will buoy the U.S. economy and shrink the effects of inflation. In reality, tariffs add additional costs in the form of a tax to the total production cycle of a good. In some cases, the additional cost effectively reduces the availability of or prices out a particular type or sector of goods that are produced internationally (making a local product more competitively priced as a result). However, there are plenty of products that simply aren't made in the United States or are but experience functional ceilings on the production volume. Much has been made about the effects of a tariff policy specifically surrounding imports coming from Mexico. But what would that actually mean for American consumers?

Mexico is one of the United States' most important trade partners, and was the country's largest supplier of imported goods in 2023. New restrictions on how Americans interact with the Mexican manufacturing landscape will therefore drastically reformat how U.S. consumers experience all manner of basic life decisions, interactions, and consumer spending tasks. From gasoline prices to emergency room visits, these are some of the most important products and sectors affected by new tariff targets aimed at Mexican exports to the United States.

Cars are the biggest import product category by value. In 2023 vehicles (besides tram and rail operations) amounted to $130 billion in imports, dwarfing the next highest category (electrical equipment, at $85.56 billion). Essentially, every major car brand utilizes factories operating in Mexico to build its products. Ford, Chevrolet, Nissan, Audi, and Toyota all assemble vehicles in Mexico, among many others. Roughly 3.7 million vehicles were built in Mexico in 2019, with the lion's share destined for export from the moment they were completed. Perhaps most tellingly, the bulk of Mexican automotive fabrication is done in north and central Mexico, near Mexico City and the urban center, or the border with the U.S. to the north.

Vehicles like the Audi Q5, Ford's Bronco Sport and Maverick, the Kia Rio and Forte, Chevrolet's Cruze, Equinox, Silverado, and the Toyota Tacoma are all manufactured south of the border and then imported. Others like Volkswagens, Hondas, BMWs, and Fiats also originate in Mexican automotive plants before hitting the American market. The reality is that so much of the U.S. automotive marketplace is fueled by imports, with Mexico leading the charge in this arena, that reliance on geographically proximal partnership is entrenched in the experience of buying a new car, with almost no regard to what make or model that vehicle might be.

Fruits, vegetables, and other agricultural products are imported into the United States from over 125 individual nations around the world. The largest American trading partner in this sector, however, is Mexico. The distribution of imports is staggeringly weighted toward a partnership with this southern border sharer, with 77% of all imported produce originating in Mexico versus 22% from all other countries (including Canada's 11% share). It's the owner of a geologically diverse landscape with plenty of climate variance, perfect for all manner of fruit, nut, and vegetable growth.

The United States is home to a uniquely diverse geography, too, and a great many fruits and vegetables will grow perfectly well within American communities. The issue at hand isn't a replacement of essential produce like onions, tomatoes, and peppers, or berry varieties (of which Mexico accounts for nearly 60% of all berry imports). It's a wiliness among American farmers to grow these crops instead of others. U.S. farm subsidies help American agriculture sustain itself, with total spending by the federal government rising above $20 billion every year. The largest recipients of this federal money is large scale producers of crops like corn, wheat, soybeans, and rice. These producers are unlikely to shift gears and begin planting tomatoes or onions without financial incentive. Moreover, much of the imports coming from Mexico are aimed at maintaining supply throughout the winter months when the American growing season winds down. Trade in this area simply isn't going away.

Equipment necessary to powering all manner of computerized gear, and computers themselves, is imported from Mexico at a staggering rate. Second only to China, Mexican exports of computers and computer equipment reached $36.8 billion in 2022, and between 2021 and 2022 Mexico served as the fastest growing point of origin for American imports in the sector. Nearly half a million Mexican workers clock in every day to build computers and their integrated components at more than 730 factories across the country. 

One of the largest hubs of manufacturing in this sector is found in Baja California, just across the border and in prime location for export eastward across the Pacific and up onto American shelves. Companies like Samsung, LG, and Foxconn all operate plants here, tapping into a skilled workforce that saves an estimated 15% to 20% in manufacturing costs over building the same products in the United States. That competitive advantage is perhaps still growing, too. Considering China's aging labor force, it's unlikely to remain a primary trading partner delivering some of the most competitively priced goods available. In comparison, Mexico's workforce is characterized by an almighty geographic advantage when tapping into the U.S. consumer market and a skilled labor pipeline that produces more than 100,000 trained engineers and electrical technicians every year.

Among some of the most impactful goods produced in Mexico are medical devices. In fact, Mexico is the eight-largest manufacturer of medical equipment in the world and the leading producer of vital equipment like syringes, surgical needles, and pacemakers. The total breadth of Mexican-made devices ranges from diagnostic equipment to minute components used in surgical procedures, testing, and general patient wellbeing. Companies like Medtronic, Siemens, GE Healthcare, Abbott Laboratories, Welch Allyn, and Johnson & Johnson operate significant manufacturing presences in Mexico. An increase in the price of goods like rubber gloves, gauze, and sterilization equipment will also come into play in the event of new import controls targeting Mexican manufacturing.

Up and down the health care industry landscape, Mexican manufacturing plays a huge role, potentially inundating health care providers with a tidal wave of price hikes that ultimately get passed onto those experiencing the greatest level of need. If you find yourself heading into your doctor's office or the hospital in the coming months, it's a good idea to double down on a particularly important strategy for managing your expenses. Every patient should make sure they ask for an itemized bill before paying for medical expenses. In the wake of increased prices on all sorts of essentials for hospitals, don't be surprised if your insurance company tries to pass along some of the added cost to you.

Mexico might not seem like an important trade partner in the petroleum marketplace given the looming presence of other foreign powers like Saudi Arabia, Iraq, and Brazil. But the reality of the American energy marketplace is a convoluted one. In practice, The United States produces a huge volume of crude petroleum itself (averaging almost 13 million barrels per day of crude oil in 2023). Casual onlookers might be surprised to learn that oil isn't a monolithic product. Titans of the market like Saudi Arabia extract a light, "sweet" brand of crude oil, whereas North American crude is heavier and contains a significantly higher proportion of sulfur. Because of this regional variance, American refineries have largely invested in processes that are efficient at utilizing this heavier, cut-rate oil often considered inferior because of the added processing demands. The result is a leaner brand of competitiveness in the oil marketplace, efficiently turning around the same end product for less and allowing American oil interests to weigh more effectively as a counterbalance against Saudi-led OPEC price controls (à la events like the 1973 embargo, which skyrocketed Americans' cost at the pump).

However, energy independence in the petroleum marketplace relies on an intensely mobile trade strategy that loops in participation with Mexico and Canada. Canada supplies 52% of petroleum imports to the U.S., while Mexico accounts for 11% — America's top two suppliers by a long shot. While some refined petroleum is imported alongside a large net export balance, the U.S. is an exclusive importer of crude oil from Mexico (exporting none in return). This helps support an agile refined petroleum marketplace in the U.S. and requires a major inflow of crude oil from its closest trading partners.