Your next trip to the grocery store may soon come with a higher price tag, as President Donald Trump's administration has implemented significant tariffs on imports from Canada, Mexico and China. Effective March 4, these measures include a 25% tariff on goods from Canada and Mexico and a 20% tariff on Chinese imports.
These tariffs could have a noticeable impact on grocery prices in the near future, particularly because Mexico and Canada are two of America's largest suppliers of fresh produce, meat and beverages. In 2023, the U.S. imported over $45 billion in agricultural products from Mexico, with nearly three quarters consisting of fruits, vegetables, beer, tequila and other beverages, according to the U.S. Department of Agriculture.
Similarly, the U.S. imported about $40.5 billion in Canadian agricultural goods, including beef, pork, grains, potatoes and canola oil. A 25% tariff on these imports could drive up costs significantly, depending on how much of the burden businesses choose to pass along to consumers.
Beyond individual grocery bills, the broader economic implications of these tariffs, such as potential retaliatory measures from trading partners and disruptions in supply chains, could affect the availability and pricing of various products.
What food the US gets from Mexico and Canada
The United States relies heavily on Mexico and Canada for a substantial portion of its food supply, with these neighboring countries serving as key contributors to various agricultural sectors.
Mexico stands as the largest supplier of fruits and vegetables to the U.S., providing essential produce such as tomatoes, cucumbers, bell peppers, jalapeños, limes and mangos. Notably, approximately 81% of avocados consumed in the U.S. in 2024 originated from Mexico, according to USDA data. Canada also plays a pivotal role in supplying the U.S. with grains, livestock, meats and poultry.
In the beverage sector, both Mexico and Canada rank among the top four providers of alcohol to the United States. Mexico is the largest exporter of beer, with 18% of all beer consumed in America originating from Mexico, according to the Beer Institute.
However, the recent implementation of a 25% tariff on imports from Mexico and Canada by Trump's administration is poised to disrupt this equilibrium. Given that grocery retailers typically operate on thin profit margins, they may have limited capacity to absorb these increased costs, potentially passing them on to consumers.
The broader economic implications are also significant. The U.S. traditionally exports more agricultural goods than it imports; however, the value of imports has risen faster than that of exports over the past decade, according to the USDA. Factors such as climate change have increased U.S. reliance on countries like Mexico, where growing conditions are more favorable.
How soon will new tariffs impact grocery prices?
Despite the administration's assurances that these tariffs will not raise prices for consumers, industry leaders express concerns about imminent cost increases.
Target CEO Brian Cornell highlighted the company's reliance on Mexican produce during winter months, indicating that the newly imposed 25% tariffs could necessitate price hikes on fruits and vegetables as early as this week. He stated in an interview with CNBC, "Those are categories where we'll try to protect pricing, but the consumer will likely see price increases over the next couple of days."
While the exact magnitude of price changes will depend on various factors, including how much of the increased costs retailers choose to pass on to consumers, it is reasonable to anticipate that products heavily reliant on imports from Mexico and Canada will see noticeable price hikes and limited availability in some cases. Consumers should be prepared for these adjustments as the market responds to the new trade policies.
How to save on groceries amid tariffs
In light of potential increases in food prices, consumers can adopt several strategies to manage their grocery expenses effectively. Here are some practical tips to help you save on food:
Stock up on non-perishable items and buy in bulk
Purchasing non-perishable goods in bulk can lead to significant savings over time. Items such as canned goods, pasta, rice and grains have long shelf lives and are often more affordable when bought in larger quantities.
Memberships at warehouse clubs like Costco or Sam's Club can provide access to bulk purchasing options, allowing you to stock up on essentials at reduced prices.
Grow your own produce and preserve seasonal foods
Starting a home garden allows you to cultivate fresh vegetables and herbs, reducing reliance on store bought produce. Even with limited space, container gardening can yield substantial results.
Preserving seasonal fruits and vegetables through methods like dehydrating or freeze drying ensures you have access to nutritious options year-round. Utilizing equipment such as dehydrators and freeze dryers can extend the shelf life of your garden's bounty.
Plan meals and be flexible with ingredients
Creating a meal plan helps in organizing your shopping list and reduces impulse purchases. Being adaptable with recipes — such as substituting unavailable or expensive ingredients — can also keep costs down.
For example, if eggs are scarce or pricey, consider using alternatives like applesauce, mashed bananas or commercial egg replacers in your baking and cooking.
Shop at value retailers and local sources
Exploring discount grocery stores can uncover deals on everyday items. These stores offer quality products at lower prices, often through cost-cutting measures like private-label brands, streamlined store layouts and bulk purchasing.
Whether it's using tips and tricks at Aldi’s no-frills shopping experience, seeing Trader Joe’s curated selection of affordable specialty items, or making use of Walmart and BJ’s bulk savings, these stores provide great deals on everyday essentials without sacrificing quality. Even wealthy shoppers have been flocking to Walmart due to the deals.
Additionally, purchasing meat and produce directly from local farms can be economical and support local agriculture. Buying meat in bulk from local sources often results in lower per-pound costs and ensures fresher products.
Maximize your credit card rewards
Leveraging your credit card's cash-back incentives can be a strategic way to offset rising costs in groceries and dining out. Many credit cards offer rewards in these spending categories, allowing you to earn back a percentage of your purchases.
To fully benefit from such rewards programs, it's crucial to pay off your balance in full each month. Otherwise, accruing interest charges can negate the advantages gained from cash-back incentives.
For example, the American Express® Gold Card offers 4 Membership Rewards® points per dollar spent at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X) and at restaurants worldwide.
Additionally, new cardholders can earn 60,000 Membership Rewards® points after spending $6,000 on purchases within the first six months of card membership. It’s important to note that this card has an annual fee of $250.
Below are a few cards that can help you save on food costs:
Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express can help you save on groceries by offering 6% cash back on the first $6,000 charged and 1% back after exceeding this limit.
If you spend $50 per week on groceries, you could earn $156 in annual cash back, according to The Points Guy. This excludes purchases at big-box retailers like Walmart and Costco.
American Express® Gold Card
If you spend big on groceries and dining, the American Express® Gold Card offers valuable rewards. You’ll earn 4 points per dollar at grocery stores (up to $25,000 annually) and on dining out (up to $50,000 annually). After reaching these limits, you'll earn 1 point per dollar.
These rewards can equate to up to 8% cash back based on their valuations.
Preparing for rising food costs and potential shortages
As new tariffs take effect, consumers should anticipate not only increased grocery prices but also potential shortages of certain imported goods. Implementing measures like bulk purchasing, meal planning, sourcing food locally, growing your own produce and maximizing credit card rewards can help mitigate rising costs and limited availability.
