The US government has implemented a 17% tariff on the majority of tomatoes imported from Mexico, effective immediately. This decision comes after the US opted to withdraw from a long-standing agreement with Mexico, asserting that it had failed to safeguard American tomato farmers against unfairly priced imports from their southern neighbor.
US Secretary of Commerce Howard Lutnick stated, "For far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes." In contrast, Mexico has denied allegations of dumping its tomatoes at low prices in the US market, pointing out that the popularity of these tomatoes stems from their high quality.
The new tariff is expected to result in increased prices at supermarkets and dining establishments, particularly affecting items such as pizza sauces and salsas. According to the Florida Tomato Exchange, about 70% of the tomatoes consumed in the US are imported from Mexico, making this tariff impactful in various sectors.
Proponents of the tariff argue that it will encourage American consumers to purchase domestically grown tomatoes, thereby boosting local agricultural trade. However, Mexico's economy and agriculture ministry have stated that due to the sheer volume of tomatoes imported from Mexico, substituting these products would be virtually impossible. The Mexican government plans to negotiate a new deal before its producers face severe consequences, while also promising to assist Mexican tomato growers in finding new markets.
The request for protection from US tomato growers dates back to 1996 when they claimed they were being undercut by their Mexican counterparts, prompting the US to issue an antidumping order which imposed duties on imported tomatoes to give a competitive edge to American produce. Over the years, five agreements were established, suspending those tariffs in exchange for Mexico's commitment to sell at or above a minimum price.
The recent withdrawal from the 2019 suspension agreement marks a significant shift in US trade policy. Additionally, tensions have risen as the US President has threatened to impose a 30% tariff on all Mexican goods starting from August 1, citing Mexico's insufficient measures to combat drug trafficking across North America. The potential for tariffs is not limited to Mexico, as Brazil, China, and the EU have also received threats regarding trade measures from the US.