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US--Mexican Tomatoes-Tariffs 07/14 16:44
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.
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