In this installment of the ‘Agronometrics In Charts’ series, we take a look at the effect of the tariffs announced by President Trump on the avocado market. Each week the series looks at a different horticultural commodity, focusing on a specific origin or topic visualizing the market factors that are driving change.

"The success of the avocado industry is rooted in our trade relationship with Mexico," said David Ortega, a Michigan State University professor of food economics and policy. This statement underscores the importance of Mexican avocados in the U.S. market and highlights the deeply intertwined economic partnership between the two nations.

Avocado cultivation requires a precise combination of factors: geography, altitude, climate, sunlight, rain, irrigation, topography, and soil quality. Few places in the world offer the ideal conditions necessary for large-scale avocado production. One such region is the Mexican state of Michoacán, which has earned a reputation as the global capital of avocado production. 

The journey of Mexican avocados into the U.S. market was not immediate. For decades, American policies restricted their importation due to concerns about pests and competition with domestic growers. This changed in the 1990s when the U.S. eased restrictions following the signing of the North American Free Trade Agreement (NAFTA), arguably the most consequential treaty in the history of avocado trade. However, despite this agreement, it took an additional 15 years before Mexican avocados were fully available nationwide. The first imports reached the Northeast and Midwest in 1997, but it wasn’t until 2007 that Mexican avocados gained unrestricted access to the entire U.S. market.

Since 1994, Mexican avocados have been exempt from tariffs, a status that was reinforced with the renewal of the United States-Mexico-Canada Agreement (USMCA) in 2020. However, recent confusion surrounding a proposed 25% tariff on Mexican agricultural products has caused widespread concern in the avocado export sector.

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

 "Mexican avocados have never paid tariffs since the beginning of the Free Trade Agreement in 1994 and remain protected thanks to the renewal of the USMCA in 2020. That hasn't changed," confirmed Manuel Cerda, president of the Association of Avocado Producers and Exporters of the State of Mexico (Apeamex). Nevertheless, there is growing apprehension over the upcoming renegotiation of the treaty in 2026, with speculation that the U.S. government may push for an early review in 2025 to establish new trade conditions.

Despite being exempt from tariffs, the mere announcement of potential border taxes led to significant disruptions in the industry. "The initial announcement of the tariffs caused so much fear that major importing companies completely halted their avocado shipments. The situation led to a logistical collapse at the border, where avocado shipments decreased by up to 90%, impacting customs operations and transportation services," Cerda explained.

Adding to the chaos, some exporters who paid the 25% tariff before the policy was suspended are now seeking refunds. "Many shipments that crossed the border during the days of uncertainty did so under the 25% tariff. Now, exporters are exploring legal avenues to reclaim those payments since the U.S. reversed its decision shortly afterward," Cerda added.

In response to these challenges, Mexican avocado exporters are actively seeking to reduce their dependence on the U.S. market. "For years, we have left other markets in the hands of countries such as Peru and Colombia, but now it's time to reclaim them," said Cerda. Key target markets include Europe, Japan, South Korea, the United Arab Emirates, and Canada.

Currently, 91% of avocados consumed in the U.S. come from Mexico, making any trade restrictions highly disruptive for both economies. To safeguard their interests, Apeamex is engaging in discussions with both Mexican and U.S. authorities to ensure that avocados remain tariff-free. The association has also retained a U.S.-based law firm to challenge any unfair trade policies and seek the reimbursement of undue payments. "Exporters cannot afford a situation where every political change puts trade at risk. We've had free access to the U.S. for 30 years, and it's not fair that they can suddenly change the rules of the game. We are taking legal action to protect our interests," Cerda asserted.

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

"It's a daily uncertainty. One day we are told one thing, and the next everything changes. For now, we are using this time to strengthen relationships with customers in other countries and prepare for any scenario," Cerda concluded.

Source: USDA Market News via Agronometrics.

(Agronometrics users can view this chart with live updates here)

As the avocado industry navigates these challenges, it remains clear that Mexico and the U.S. share a vital trade relationship—one that has shaped the avocado market for decades. Moving forward, the industry must remain vigilant in protecting its interests while continuing to adapt to the ever-evolving trade landscape.

In our ‘In Charts’ series, we work to tell some of the stories that are moving the industry. Feel free to take a look at the other articles by clicking here.

All pricing for domestic US produce represents the spot market at Shipping Point (i.e. packing house/climate controlled warehouse, etc.). For imported fruit, the pricing data represents the spot market at Port of Entry. You can keep track of the markets daily through Agronometrics, a data visualization tool built to help the industry make sense of the huge amounts of data that professionals need to access to make informed decisions. If you found the information and the charts from this article useful, feel free to visit us at www.agronometrics.com where you can easily access these same graphs, or explore the other 21 commodities we currently track.