US imposes 17% duty on Mexican tomatoes hoping to boost local production

Business Standard

a day ago

Mexico currently supplies around 70 per ccent of the US tomato market, up from 30 per cent two decades ago, according to the Florida Tomato Exchange
AP Washington
The US government said Monday it is placing a 17 per cent 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 US tomato industry and ensure that produce eaten in the US is also grown there. Mexico currently supplies around 70 per ccent of the US tomato market, up from 30 per cent two decades ago, according to the Florida Tomato Exchange.
But opponents, including US companies that grow tomatoes in Mexico, said the tariff will make fresh tomatoes more expensive for US buyers.
Tim Richards, a professor at the Morrison School of Agribusiness at Arizona State University, said US retail prices for tomatoes will likely rise around 8.5 per cent with a 17 per cent duty.
The duty stems from a longstanding US complaint about Mexico's tomato exports and is separate from the 30 per cent base tariff on products made in Mexico and the European Union that President Donald Trump announced on 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 US 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.
In announcing its withdrawal from the Tomato Suspension Agreement, the Commerce Department said it had been "flooded with comments" from US tomato growers who wanted better protection from Mexican goods.
But others, including the US Chamber of Commerce and the National Restaurant Association, had called on the Commerce Department to reach an agreement with Mexico.
In a letter sent last week to Commerce Secretary Howard Lutnick, the Chamber of Commerce and 30 other business groups said US companies employ 50,000 workers and generate $8.3 billion in economic benefits moving tomatoes from Mexico into communities across the country.
"We are concerned that withdrawing from the agreement at a time when the business community is already navigating significant trade uncertainty could lead to retaliatory actions by our trading partners against other commodities and crops that could create further hardship for US businesses and consumers," the letter said.
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