Wholesale merchants: US tariff talk may force Mexican growers to sell elsewhere

Jimmy Iovine
Photo credit Steve Tawa/KYW Newsradio
By KYW Newsradio 1060
PHILADELPHIA (KYW Newsradio) — As President Donald Trump's threatened tariffs on Mexico are about to kick in, merchants at the Philadelphia Wholesale Produce Market along Essington Avenue in Southwest Philadelphia are just about ready to throw tomatoes at Washington politicians. 

Jimmy Iovine, the primary produce buyer at the family-run Iovine Brothers Produce in Reading Terminal Market, frequents the produce market — which is bigger than 14 football fields — three to four times a week. For now, he's trying not to think about tariffs.

"I come to shop with the intention of selling and making sure that my customers have what they want," he said.

Customer satisfaction, he said, is his first priority. "Then, we work on price."

But supply and demand dictate what consumers pay.

"Tariffs may eventually raise the price of things," Iovine said. "But I truly believe that supply and demand will determine more prices than tariffs, unless it continues on for a long time."

If supply tightens because of tariffs, Iovine will definitely feel the squeeze.

"Fifty-two weeks of the year, we're selling Mexican products. We do think eventually the American people will be paying those tariffs," he noted.

He added that produce in general are commodities, and the prices are set by the markets.

"If the Mexican growers can't afford to send products here, because of higher tariffs — meaning higher prices to the American people — then they may chose to send it to Europe or Asia, in which case your supply would go down here, and prices would go up," he explained.

Tom Kovacevich's T.M. Kovacevich is one of the larger fruit merchants in the U.S.

"Honestly to us, it's tariff schmariff," he rebuffed. "It has no bearing on us."

"Just recently, they closed four toll booths," he alluded to the border security booths. "A year ago, there were 10 opened."

Kovacevich expects tariffs will be eaten by the growers.

"If they do kick in, say a $20 item has a 5% tariff — that's an extra dollar. That dollar will not be borne by the American consumer, anyway."

He said the bottom line is "buyers will pay what the buyers can pay," and "growers will be battling for the sale." In time, Kovacevich said enough fruit will get across, and "that dollar will come out of the growers' pocket."