The Trump administration will impose a 21% tariff on Mexican tomatoes starting in July, ending a long-standing free trade agreement and potentially increasing prices for American consumers.
At a Glance
- The U.S. Department of Commerce announced withdrawal from the 2019 Suspension Agreement on Fresh Tomatoes from Mexico, effective in 90 days
- Starting July 14, Mexican tomatoes will face a 20.91% tariff
- In 2023, the U.S. imported $2.7 billion worth of tomatoes from Mexico, representing 99% of Mexico’s tomato exports
- U.S. tomato growers have long complained of unfair competition from lower-priced Mexican imports
- Critics warn the tariff will increase tomato prices for American consumers
End of Free Trade Agreement
The Trump administration plans to withdraw from a trade agreement that has allowed Mexico to export tomatoes to the United States duty-free. The Department of Commerce announced its intent to withdraw from the 2019 Suspension Agreement on Fresh Tomatoes from Mexico, with termination effective in 90 days. This agreement, which set minimum pricing standards and quality inspections for Mexican tomatoes, will be replaced by an antidumping duty order imposing tariffs of 20.91% on most Mexican tomato imports.
The suspension agreement was originally designed to protect U.S. tomato growers by requiring Mexican producers not to sell tomatoes below established reference prices. Since 1996, the U.S. and Mexico have negotiated five such agreements on tomato imports. However, the Commerce Department now claims the current arrangement has failed in its intended purpose of protecting American growers from unfair competition.
Impact on Trade Relations
Mexico exports 56% of its tomatoes, with an overwhelming 99% destined for U.S. markets. In 2023 alone, the United States imported $2.7 billion worth of tomatoes from Mexico. Major entry points include the Laredo customs district in Texas and Nogales, Arizona. The new tariff applies to fresh and chilled tomatoes but excludes those specifically designated for processing.
“The current agreement has failed to protect U.S. tomato growers from unfairly priced Mexican imports, as Commerce has been flooded with comments from them urging its termination. This action will allow U.S. tomato growers to compete fairly in the marketplace,” the department said in a recent news release.
The tariff on Mexican tomatoes is part of broader Trump administration trade measures against Mexico, which also aim to address illegal immigration and drug smuggling. Importantly, these tomato tariffs do not affect imports under the United States-Mexico-Canada Agreement (USMCA), maintaining a distinction between different trade mechanisms with Mexico.
Reactions from Stakeholders
The Florida Tomato Exchange (FTE), which has long advocated for more restrictions on Mexican tomatoes, enthusiastically supports the new tariffs. The organization has consistently claimed that the suspension agreement failed to prevent unfairly traded Mexican tomatoes from harming the U.S. industry, and views the termination as a significant policy win for domestic growers.
“This is a major victory for American agriculture. For decades, American tomato farmers have suffered from unfair trade practices by Mexican tomato exporters. Terminating this agreement and enforcing U.S. trade laws is the only way to finally give domestic growers the relief they’ve long deserved,” said Robert Guenther, FTE Executive Vice President.
Not all reactions have been positive, however. Michael R. Strain from the American Enterprise Institute criticized the policy, suggesting it will increase U.S. tomato prices. This concern aligns with broader economic principles that tariffs on imported goods typically result in higher costs for consumers, as retailers pass additional expenses down the supply chain.
Trade Law Enforcement
The Commerce Department’s decision reflects the Trump Administration’s emphasis on strict enforcement of U.S. trade laws. Antidumping duties are specifically applied to foreign companies that sell products in the U.S. below production cost or home market prices – a practice commonly referred to as “dumping.” The Commerce Department’s Enforcement and Compliance unit is responsible for enforcing these laws based on factual evidence.
According to the International Trade Administration, there are currently 734 antidumping and countervailing duty orders in place to protect American industries from unfair foreign competition. The addition of Mexican tomatoes to this list represents a continuation of the administration’s approach to international trade, which prioritizes protecting domestic industries even at the potential cost of higher consumer prices.