Next Up On Trump's Tariff Plate: Mexican Tomatoes, At 21 Percent

Forbes

2 days ago

Threre's a good chance that tomato you eat this summer came from Mexico, since Florida's growing ... More season has ended and California's tomatoes often are used for processing into Ketchup, tomato sauce and the like.
A 21% tariff on fresh tomato imports from Mexico is scheduled to go into effect next month, just as the season for shipments from south of the border winds down and domestic production kicks in.
Should the Mexican and U.S. governments fail to renew a 2019 agreement before July 14, the most likely beneficiary will be the state of California, led by one of President Trump's top antagonists, Gov. Gavin Newsom. For four months of the year, California leads the nation in tomato production.
Even that benefit is questionable. More about that in a moment.
The other eight months of the year, Florida leads the nation in tomato production. That means the state of Florida, a state that, like a ripening tomato, is becoming redder and redder, would not likely benefit nearly as much.
That's true unless the tariffs stay in place until the winter processing season.
The loser would almost certainly be American consumers, who, as it turns out, like to eat tomatoes all 12 months of the year in one form or another. As Dominic Pino wrote in the National Review, 'The government is straightforwardly promising to take money from you and give it to U.S. tomato growers.'
Consumers, and businesses, always lose when specific industry or special interest – in this case, Florida tomato growers – is able to convince the federal government its industry needs protection from foreign competitors 'dumping' their produce or goods on U.S. markets.
Similarly, the aluminum and steel industry have been in the news lately. It has benefitted from protection against foreign competition at the expense of American consumers on more than one occasion, including many years recently.
Trump, not one to be shy about threatening to impose tariffs, withdrew from the 2019 agreement with Mexico that had suspended previous penalties on tomato imports, something my company's vice president, Tatiana Panzardi, brought to my attention.
As is the case with steel, the feud is not a new one. The first anti-dumping agreement was signed in 1996, and renewed numerous times, including in 2019, during Trump's first term in office.
One thing is clear: The United States is increasingly dependent on Mexico and other countries for its fruits and vegetables, including the tomato (which is a fruit even though the U.S. Census Bureau classifies it as a vegetable).
Imports now account for about 60% of all the fruit consumed in this country, double what it was in the early 1980s. While Mexico does not dominate all fruit and vegetable imports – 45.01% of all fruits this year, 67.21% of all vegetables – it does account for more than 90% of all tomato imports most years. Through April of this year, that percentage has dipped to 89.03%.
The vast majority of fresh tomato imports into the United States occur at three ports of entry along ... More the U.S.-Mexico border. Canada is the only other meaningful supplier; those tomatoes enter at Detroit's Ambassador Bridge.
Just three ports of entry from Mexico – Nogales, Ariz.; Pharr, Texas; and Laredo, Texas – account for 82.26% of all fresh tomato imports from Mexico this year. Those three, as well as all other ports of entry on the Mexican border that import tomatoes, have wrapped up the busy first-of-the-year season, including a slow April.
Though the three leaders volume is down this year – with Nogales down 31.05% – imports from Mexico have still topped $1 billion through April for the third consecutive year, according to my analysis of the most recent U.S. Census Bureau data. In the first four months of 2024, imports through Nogales had topped $500 million, partially explaining the decline this year.
Indeed, 2024 was a record year, with imports into the United States topping $3.63 billion, a 6.91% increase since 2017, Trump's first full year as president. This year, through April, tomato imports are down 17.63%, below the pace set in both 2024 and 2023.
This April was a particularly tough month. While the previous April, in 2024, was the fourth-best month in the last two years, this April was the fifth-worst. Generally, July and August are the two slowest months for imports of tomatoes from Mexico; June and September often bracket it in being relatively slow.
Those are the only four months when California, which specializes in tomatoes for processing – think ketchup, salsa, tomato sauce and paste, tomato juice, etc. – leads the nation. Tomatoes from Florida are often for the so-called 'fresh' market, and it leads the nation in the other eight months of the year, with two primary harvesting seasons – winter and spring.
A couple of questions remain:
What happens if the tariffs go into place, ending the 2019 agreement? That remains to be seen – particularly given the global trade war Trump initiated on April 2 – but it certainly would not be anti-inflationary.
And, if they go into place, will they stay in place until the South Florida season kicks into gear in the late fall and winter?
Then Florida growers would benefit, presumably, being able to charge higher prices for their tomatoes – at the expense of American consumers.