Prime Highlights
- U.S. withdrawal from long-standing tomato trade agreement, imposing 17.09% tariff on Mexican imports.
- U.S. retail prices of tomatoes will rise 10–50% over next few weeks.
Key Fact
- Mexican tomatoes account for approximately 70%–90% of U.S. fresh tomato imports, worth $3 billion annually.
- USMCA’s new tariff stems from price dumping and unfair price claims.
Key Background
The United States put a 17.09% antidumping duty on fresh Mexican tomatoes, bringing an end to almost three decades of peaceful, healthy trade under the Tomato Suspension Agreement. The agreement was entered into in its original shape in 1996 and recently renewed as late as 2019, preventing the U.S. from levying duties for Mexico’s adherence to price fairness regulations.
The U.S. Department of Commerce decided to terminate the agreement due to the complaint of American tomato growers, particularly those in Florida, that Mexican tomatoes were dumping them into the market at prices below fair market value and prejudicing local farmers. The Commerce authorities stated the step will “level the playing field” and save the American farm industry.
Mexico, which exports billions of dollars worth of tomatoes to the U.S. annually, denounced the measure as “politically motivated and unfair.” Mexican farmers assert that their industry has flourished through gains in quality and production efficiency—rather than price fixing. They promise the measure will hurt consumers and destabilize farm trade along the border, and insist on renewed negotiations.
American consumers will feel the tariffs’ sting immediately, with prices at the grocery store and on restaurant menus rising 10% to 50% for tomatoes, according to industry analysts. That can influence a lot of different foods ranging from fresh tomatoes to salsa, ketchup, and processed food. In addition, the action could cut Mexican tomato imports by 5% or more, distorting supply chains as well as putting pressure on U.S.-Mexico trade relations.
This responsibility also heralds a bigger protectionist wave in trade policy in 2025, as the U.S. launches new tariffs on several Mexican and Canadian imports. Its detractors argue the policy can have an ironic backfire impact by increasing prices for consumers and fueling trade tensions as inflation and food security come to dominate the domestic agenda.