Latest news with #TomatoSuspensionAgreement
Time Magazine
20 hours ago
- Business
- Time Magazine
Why Tomatoes Are Becoming a Lot More Expensive
Food prices have been quickly climbing for years now, and now there's another staple that could see prices soon shoot up: tomatoes. Mexican tomatoes are immediately being slapped with a 17% tariff, the U.S. Dept. of Commerce said on July 14, announcing it was withdrawing from a 2019 agreement that suspended tariffs on tomatoes imported from Mexico. That could affect a lot of grocery store tomatoes. Although the fruit—or vegetable, depending on who you ask—is also grown in Florida, about 70% of fresh tomatoes consumed in the U.S. come from Mexico, says David Ortega, a food economist at Michigan State University. Although the price of a bunch of tomatoes may only increase by a few dozen cents, the increase comes at a time when consumers are already sick of inflation, and when tariffs threatened by the Trump Administration could further drive up prices, he says. 'This is one of the most widely consumed fruits or vegetables in the U.S., and it's important to put it in the context of consumers' experience with food prices over the past few years,' Ortega says. 'They're stretched thin, and even a few cents adds up, especially for low-income households.' Why tomato prices are rising The spat between Mexican and U.S. farmers has a long history. In 1996, U.S. farmers complained to a trade court that Mexican farmers were 'dumping' tomatoes, meaning they were selling tomatoes to the U.S. at an artificially low price. In response to the complaint, Mexican farmers agreed to set a floor price on tomatoes in an effort to ensure that U.S. farmers were not being undercut. In exchange, the U.S. paused an investigation into whether Mexican farmers were unfairly dumping tomatoes in the U.S. market. The U.S. and Mexico have come to new agreements about the floor price for tomatoes four times since then, but farmers have complained that Mexico is still engaging in unfair trade practices. The market share of U.S. tomatoes has dropped to 30% from 80% since 1996, according to the Florida Farm Bureau, while Mexican tomato imports have increased 400%. Read More: The 9 Most Underrated Healthy Foods The Commerce Department first announced in April that it was withdrawing from the truce, which was called the Tomato Suspension Agreement, but said at the time that the tariffs on Mexico tomato imports would be 20.9%. That tariff was slightly reduced in Commerce Secretary Howard Lutnick's July 14 announcement formalizing the plans to withdraw. 'For far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes,' he said. 'That ends today.' U.S. consumers may not see the effect of the new tariffs until the fall, says Ortega, because tomatoes are currently in season in the U.S. We rely on imported tomatoes more heavily in the winter. Why other food prices are going up, too The levying of tomato tariffs came a day before new government inflation data showed that food prices were continuing to rise. The Consumer Price Index, or CPI, showed that prices of beef and veal were up 10.6% in June from a year ago, that egg prices were up 27.3% and that coffee prices were up 13.4%. Overall, inflation rose 2.7% from a year ago. The rising prices of beef, eggs, and coffee are not directly related to tariffs, says Ortega. The price of beef is going up because a 2022 drought made it too expensive for farmers to keep livestock, and now the cattle inventory in the U.S. is extremely low. Americans still demand beef, though, so low supply and high demand is causing prices to surge. Egg prices increased from a year ago because of avian flu, although their price actually fell from a month ago. And coffee prices are climbing because climate change has affected crops in places like Brazil and Vietnam, Ortega says. Read More: Food Dyes Are Lurking in Surprising Places Still, tariffs aren't helping: U.S. producers depend on certain types of lean beef from Brazil to make ground beef, for instance, Ortega says, and the 10% tariff on almost all food imports is making that more expensive. Those 10% tariffs are affecting other food products as well. 'This marks the first inflation report where tariffs are beginning to show up materially in key categories—from appliances and furnishings to apparel and groceries,' said Daniel Hornung, senior fellow at MIT, about the CPI report. It is unlikely to be the last, he says, since businesses are working through their pre-tariff inventories and will likely be forced to pass price increases along to consumers soon. Not to mention the giant tariffs that the Trump Administration has pledged to levy on some of the places we get a lot of our food, says Ortega. Trump recently threatened Brazil with 50% tariffs. If they go into effect Aug. 1 as currently planned, they will drive up the price of beef, oranges, orange juice, and more. Many of those imports from Brazil can't easily be replaced by U.S. goods. Florida orange crops, for instance, have been heavily affected by citrus greening, which is a tree disease, and by devastating hurricanes. 'If these tariffs remain in place,' Ortega says, 'they will have a notable impact on food prices.'
Yomiuri Shimbun
a day ago
- Business
- Yomiuri Shimbun
US Imposes a 17% Duty on Fresh Mexican Tomatoes in Hopes of Boosting Domestic Production
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. In announcing its withdrawal from the Tomato Suspension Agreement, the Commerce Department said it had been 'flooded with comments' from U.S. tomato growers who wanted better protection from Mexican goods. 'Mexico remains one of our greatest allies, but for far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes. That ends today,' Commerce Secretary Howard Lutnick said in a statement. 'This rule change is in line with President Trump's trade policies and approach with Mexico.' But others, including the U.S. Chamber of Commerce and the National Restaurant Association, had called on the Commerce Department to reach an agreement with Mexico. Texas Gov. Greg Abbott, a Republican, and Arizona Gov. Katie Hobbs, a Democrat, had also urged the Commerce Department to leave the current tomato agreement in place. In a letter sent to Lutnick last week, the U.S. Chamber of Commerce and 30 other business groups said U.S. 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 U.S. businesses and consumers,' the letter said.
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Business Standard
a day ago
- Business
- Business Standard
US imposes 17% duty on Mexican tomatoes hoping to boost local production
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. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
2 days ago
- Business
US imposes a 17% duty on Mexican tomatoes in hopes of boosting domestic production
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. Mexican greenhouses specialize in vine-ripened tomatoes, while Florida tomatoes are typically grown in fields and picked green. '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. 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%. 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 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 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. In announcing its withdrawal from the Tomato Suspension Agreement, the Commerce Department said it had been 'flooded with comments' from U.S. tomato growers who wanted better protection from Mexican goods. 'Mexico remains one of our greatest allies, but for far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes. That ends today,' Commerce Secretary Howard Lutnick said in a statement. 'This rule change is in line with President Trump's trade policies and approach with Mexico.' But others, including the U.S. Chamber of Commerce and the National Restaurant Association, had called on the Commerce Department to reach an agreement with Mexico. Texas Gov. Greg Abbott, a Republican, and Arizona Gov. Katie Hobbs, a Democrat, had also urged the Commerce Department to leave the current tomato agreement in place. In a letter sent to Lutnick last week, the U.S. Chamber of Commerce and 30 other business groups said U.S. 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 U.S. businesses and consumers,' the letter said.
Chicago Tribune
2 days ago
- Business
- Chicago Tribune
US imposes 17% duty on fresh Mexican tomatoes in hopes of boosting domestic production
The U.S. government said Monday it is 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. But opponents, including U.S. companies that grow tomatoes in Mexico, said the tariff will make fresh tomatoes more expensive for U.S. buyers. 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. 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 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 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. In announcing its withdrawal from the Tomato Suspension Agreement, the Commerce Department said it had been 'flooded with comments' from U.S. tomato growers who wanted better protection from Mexican goods. But others, including the U.S. 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 U.S. 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 U.S. businesses and consumers,' the letter said.
