The avocado is the key. The imposition of tariffs won't be stopped by the warnings made by the IMF, or the editorials of the Financial Times, nor the Chinese President Xi Jinping defending globalization in Davos. No. What could really make Donald Trump voters doubt the idea of imposing tariffs on Mexico are the avocados.
The new US president has promised to make America great again by implementing protectionist measures to reduce Mexican imports. However, he hasn't told his voters that, if he carries out his threat of increasing tariffs, eating nachos with guacamole in the Super Bowl could become a luxury. This is something consumers wouldn't stand.
Demand for avocados from Michoacan soars for the grand finale of the American Football League (NFL), which will be held this year on February 5 in Houston, by more than 750% (going from 18,000 to 150,000 tons per week). Last year, there was a record 278 million avocados sold for the big day, second only to Thanksgiving.
Due to the growing US demand, which has skyrocketed in the last five years, the avocado has become Mexico's flagship agricultural product. Mexico is the world's biggest producer of avocados (with 1.5 million tons) and it exports 80% of its harvest to the US, according to Mexico's Association of Producers and Exporting Packers of Avocado (APEAM).
Last year, avocado prices doubled, due to the increase in global demand for this fruit, (which has had more than five million tags on Instagram), and to production problems.
If the new president fulfills his electoral threat to impose a 35% tariff on Mexico (which he later changed to a border tax, which he hasn't explained) prices would skyrocket in the US. So far, president Trump's protectionist rhetoric has focused on automakers. However, the agriculture industry is waiting to see what happens.
The NAFTA, the free trade agreement that brought down tariff barriers between the US, Mexico, and Canada and that has been in force since Bill Clinton signed it in 1993, is in the spotlight.
Mexican farmers say the success of the product is also benefiting US farmers, as the increased demand has made it a profitable crop and Mexico invests heavily in promoting it. In the last three years Mexico has been advertising its avocados at the Super Bowl, and it is the only agricultural product advertised there. American producers would be unable to supply the demand for this product. However, producers are already getting ready to look for new markets, just in case.
But the warnings may not raise awareness of the risks of protectionist policies. In a time of post-truth politics, it's the most unexpected things that raise awareness among the population. And the stomach is one of those things. In the UK, the rising price of Marmite, a peculiarly British spread, became the symbol of the fear of inflation that the Brexit would cause.
Only time will tell what happens with the avocado. Trump renegotiating the NAFTA could affect something as quintessentially American as the Super Bowl.
Source: elindependiente.com