US set to deal a trade blow to Mexican agriculture with 17% tariff on its tomato exports
The Department of Commerce asserts that Mexican exporters engage in unfair trade practices that have affected US farmers
More than $2.8 billion in Mexican tomato exports to the United States are at risk. The U.S. administration said on Monday that it is withdrawing a 2019 trade agreement that exempted tomato shipments from paying tariffs. Thus, from now on tomato shipments from Mexico will pay a 17% tariff.
“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. The tax on Mexican farmers stems from a long-standing complaint of alleged dumping practices filed by U.S. farmers against their Mexican counterparts in 1996. Until now, Mexico had managed to avoid paying this tariff thanks to a series of agreements to keep prices above a minimum level.
Although this new duty is separate from the package of tariffs recently announced by President Donald Trump against Mexico, it is in line with his protectionist agenda.
The complaint of unfair trade practices that led to this 17% tariff dates back to 1996. That year, the U.S. fresh tomato industry sued Mexican exporters for alleged dumping practices. After investigations and settlements, the U.S. government signed five agreements suspending this countervailing duty, the last in 2019.
Mexico is the main supplier of tomatoes to the U.S. market. With sales of more than $2.8 billion annually, the export of this produce has become a lucrative commodity that, over the past three decades, has led to direct confrontation between Mexican and U.S. producers, primarily in Florida. U.S. farmers have, on more than one occasion, accused their Mexican counterparts of deliberately selling at lower prices. The accusations of alleged dumping practices have so far failed to stem the flow of tomato exports to the United States. Last year alone, nearly two million tons were shipped.
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