US Imposes A 17 Pc Duty On Fresh Mexican Tomatoes In Hopes Of Boosting Domestic Production

 

Washington : The U.S. government said Monday it is immediately placing a 17% duty on most fresh Mexican tomatoes after negotiations ended without an agreement to avert the tariff. Proponents said the import tax will help rebuild the shrinking U.S. tomato industry and ensure that produce eaten in the U.S. is also grown there. Mexico currently supplies around 70% of the U.S. tomato market, up from 30% two decades ago, according to the Florida Tomato Exchange. Robert Guenther, the trade group's executive vice president, said the duty was “an enormous victory for American tomato farmers and American agriculture." But opponents said the import tax will make tomatoes more expensive for U.S. consumers.

 

Mexico's Economic Secretary Marcelo Ebrard said the government would continue looking for a way to once again suspend the tariff, part of ongoing negotiations between the two trading partners. In a statement Monday, he wrote that the move would "only affect the pockets of American consumers. “It's unfair and against not only Mexican producers, but on the American industry. The ground that Mexican fresh tomatoes has gained in the U.S. is because of the quality of the product, not from unfair practices," he wrote.

 

Mexican greenhouses specialize in vine-ripened tomatoes, while Florida tomatoes are typically grown in fields and picked green. Tim Richards, a professor at the Morrison School of Agribusiness at Arizona State University, said U.S. retail prices for tomatoes will likely rise around 8.5% with a 17% duty. Jacob Jensen, a trade policy analyst at the American Action Forum, a right-leaning policy institute, said areas with a higher reliance on Mexican tomatoes could see price increases close to 10%, since it will be more difficult to replace that supply, while other parts of the U.S. could see price increases closer to 6%.

 

“As an industry, we are saddened that American consumers will have to pay a tomato tax, or duty, for a reduced selection of the tomatoes they prefer, such as tomatoes on the vine, grape tomatoes, Romas, cocktail tomatoes and other specialty varieties,” said Lance Jungmeyer, president of the Fresh Produce Association of the Americas, which represents importers of Mexican tomatoes. The duty stems from a longstanding U.S. complaint about Mexico's tomato exports and is separate from the 30% base tariff on products made in Mexico and the European Union that President Donald Trump announced Saturday.

 

The Commerce Department said in late April that it was withdrawing from a deal it first reached with Mexico in 2019 to settle allegations the country was exporting tomatoes to the U.S. at artificially low prices, a practice known as dumping. As part of the deal, Mexico had to sell its tomatoes at a minimum price and abide by other rules. Since then, the agreement has been subject to periodic reviews, but the two sides always reached an agreement that avoided duties.