Controlled Environment Agriculture

Tomato Tariffs Could Lead to 50% Price Hike for American Consumers

Tomato Tariffs Could Lead to 50% Price Hike for American Consumers. Controlled Environment Agriculture; Indoor Farming; Vertical Farming

Key Takeaways

  • A group of domestic tomato producers is urging the U.S. Department of Commerce to end a trade agreement with Mexico.
  • The termination could result in tariffs of over 20% on imported fresh tomatoes.
  • Consumers may face a 50% increase in the price of fresh tomatoes.
  • The move could lead to a loss of nearly $7.5 billion in revenue for grocery retailers.
  • Over 54,000 jobs in Texas and Arizona could be at risk.

A small coalition of U.S. tomato producers is petitioning the U.S. Department of Commerce to terminate the Tomato Suspension Agreement with Mexico. This agreement, which has been in place since 1996 and was last renegotiated in 2019, ensures a stable market for the import of fresh tomatoes from Mexico to the U.S. The termination could lead to tariffs of over 20% on these imports, affecting companies like NatureSweet, the leading snacking tomato brand in Texas.

Economic and Social Impact

According to Skip Hulett, Vice President and General Counsel for NatureSweet, tomatoes imported from Mexico offer economic and social value that extends beyond their retail price. “They support jobs, businesses, and livelihoods in local communities on both sides of the border,” says Hulett. The termination of the agreement could have far-reaching consequences that outweigh the benefits for consumers, retailers, and agricultural workers.

Study Findings

A recent study by Dr. Tim Richards, Chair of Agribusiness at Arizona State University, reveals the potential ramifications if the agreement were to end. The study concludes that consumers can expect to pay an average of 50% more for fresh tomatoes. Additionally, grocery retailers could lose almost $7.5 billion in revenue. Texas and Arizona, states that heavily rely on Mexican tomato imports, could face over $4.53 billion and almost $3.40 billion in lost economic activity, respectively. More than 54,000 jobs in these states could also be at risk.

Compliance and Advocacy

The Department of Commerce has found no significant violations of the agreement by Mexican growers in its compliance audits. Over 400 companies from 32 states, including NatureSweet, are urging the U.S. Department of Commerce to preserve the agreement and find a resolution that benefits economies on both sides of the border.

Photo by Josephine Baran on Unsplash 

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