Tariffs worsen US-Mexico sugar trade issues

Mexico's sugar exports to the U.S. have been struggling due to years of drought. A new proposed tariff by President Trump could worsen the situation, disrupting a vital trade relationship. Trade agreements were designed to ensure the U.S. had a steady supply of affordable sugar from Mexico. However, due to the drought and export limits, sugar imports from Mexico are predicted to hit a 17-year low in 2025. As a result, the U.S. is turning to other countries for sugar, like Brazil. The sugar market in the U.S. is tightly controlled by regulations meant to protect farmers. Generally, Mexico enjoyed a special status that allowed it to export sugar without the same limits. But with reduced production in Mexico, U.S. importers are finding it more economical to pay higher taxes to import sugar from abroad. The proposed 25% tariffs on imported sugar could lead to even more challenges. Their implementation is set for April 2. There has been a rush to buy Mexican sugar before the tariffs take effect, but now that flow has slowed significantly. This chaos in the market has pushed up sugar futures prices in the U.S. Sugar prices have reached levels not seen since November, nearly double the world market price. Meanwhile, more imports from other countries are expected to fill the gap left by Mexican sugar. While domestic sugar production is rising, experts say the industry can handle the current demand without major disruptions. However, sugar users in the U.S. and producers in Mexico believe the trade agreement should facilitate more imports from Mexico. Concerns about supply restrictions and increased costs are growing among stakeholders on both sides of the border.