Mexico is an integral part of the U.S. economy. It’s the source of most of America’s imported beer and tractors, to say nothing of the rest of the $346.5 billion in goods it sent the U.S. last year.

Also? All those goods may soon be hit with a 5% tariff. President Trump said Thursday the tariffs will begin at 5% on June 10. They will rise an additional five percentage points each month until they hit 25% on Oct. 1. Those tariffs will remain elevated “until Mexico substantially stops the illegal inflow of aliens coming through its territory,” the White House said.

As tariffs ramp up, the price you pay for everything from cars to cauliflower will likely rise. After all, companies tend to pass tariff’s costs on to consumers, as National Economic Council Director Larry Kudlow acknowledged in May.

But beyond the ubiquitous avocados, what do we import from Mexico? To answer, we looked at imports of more than 1,230 categories of goods for the year ending in March – the most recent 12-month period for which we have data from the Commerce Department. We found a little bit of everything.

The top of the list is ruled by components for the American auto industry. Deutsche Bank Securities economist Torsten Slok told The Washington Post that two-thirds of U.S. imports from Mexico are intermediate parts U.S. companies use to produce goods. Chief among them? Cars.

 

Washington Post

It doesn’t stop there, of course. American companies increasingly look to Mexico for everything from raw materials such as gold to technical parts such as electrical transformers.

As the trade war with China intensifies, Mexico is vying to become our single largest trading partner. And an update to the transformative North American Free Trade agreement, which made Mexico the keystone of many American companies’ production processes, may soon go to Congress for approval.

But it’s not just sheer size that leaves American companies exposed. After all, if a company can simply switch to a supplier in a different country for little additional cost, then there won’t be much to pass on to the consumer.

To find hints as to which products are least likely to have low-cost alternatives, we should consider those products that come primarily from Mexico. If companies have chosen Mexico as their main supplier, we can assume it’s because the alternatives would be more expensive.

These Mexico-dependent categories include fresh produce, such as tomatoes, cauliflower and lettuce, as well as heavier equipment such as tractors and trucks. Also beer. Mexican brands such as Corona and Modelo Especial are among the best-selling beers in the country.

And it’s not just American tariffs that could send your prices higher. There are two sides to this trade relationship, and many American industries, such as agriculture, rely on Mexican buyers. There are about 126 million of them – Mexicans outnumber Canadians by 3.5 to 1.

Mexico’s retaliation against Trump’s earlier steel and aluminum tariffs had cost hog farmers about $12 per animal, Minnesota hog farmer Randy Spronk told the Post’s Laura Reiley in May.

“We’ve been hit more than any other sector,” Spronk told Reiley. “Our highest value markets are the ones that are impacted by these tariffs. We got side swiped. The additive effects of these tariffs come out of my back pocket.”