Tariffs further exacerbate troubled sugar trade between the US and Mexico

Droughts in Mexico and potential tariffs proposed by President Trump could further strain the sugar export relationship between Mexico and the United States. Mexican sugar exports to the U.S. are projected to hit a 17-year low in 2025, leading to a decrease in market share. The U.S. sugar industry, regulated to protect farmers and prevent foreign flooding, has relied on Mexican supplies until recent droughts and lower tariffs. The proposed 25% tariff under the North American Trade Agreement could exacerbate the situation, leading to increased imports from countries like Brazil and a rush to buy Mexican sugar before the tariffs take effect.

Years of drought in Mexico have already disrupted sugar exports to the United States. Now, tariffs proposed by President Donald Trump risk further straining a once-lucrative trade relationship for America’s top foreign supplier of the commodity, Bloomberg reports. Trade deals between the two countries were meant to create a reliable flow of affordable sugar to the United States. But the system has broken down, and more imports are now coming from elsewhere. Mexican supplies are expected to fall to a 17-year low in 2025, leaving the Latin American country with less market share than it had hoped. The U.S. sugar industry is tightly controlled by decades of regulations designed to protect farmers’ profits and prevent other countries from flooding it with sugar. The exception was Mexico, which freely supplied sugar under the U.S.-Mexico-Canada trade agreement until the 2014 agreement set an export cap and floor price. The arrangements made Mexico the largest foreign supplier of ...