Presently, guacamole seems to have sidestepped potential tariffs, but the fate of salsa is less certain. Although the U.S. administration delayed imposing tariffs on avocados from Mexico, it intends to introduce a substantial 21% import tax on fresh Mexican tomatoes beginning mid-July. Such a duty will significantly affect the 4 billion pounds of these tomatoes imported annually from Mexico.
Supporters of the import tax argue that it will revitalize America’s dwindling tomato sector while ensuring more tomatoes consumed domestically are cultivated within the country. Over the past two decades, the market share for Mexican tomatoes in the U.S. has increased from 30% to around 70%, as reported by the Florida Tomato Exchange. Robert Guenther, the vice president of the trade group, emphasized the importance of equalizing price competition to maintain the U.S. tomato industry. Although Florida and California are the leading tomato-producing states, the majority of California’s output is transformed into sauces and other derivative products.
Critics argue that this duty will elevate the cost of fresh tomatoes for American consumers. NatureSweet, a company from San Antonio that cultivates tomatoes on both sides of the border, states it will incur considerable monthly duty expenses unless the situation changes. Company’s chief legal officer, Skip Hulett, mentioned they are always seeking ways to enhance efficiencies. Still, he acknowledged that added costs might have to be transferred to consumers since the produce business already operates on tight profit margins.
Tim Richards, a scholar at Arizona State University’s Morrison School of Agribusiness, anticipates a potential 10.5% rise in U.S. tomato prices should the duty proceed. Meanwhile, the Mexican government has expressed confidence in negotiating a resolution. Nevertheless, if the U.S. enacts this tomato tax, Mexican President Claudia Sheinbaum has hinted at possible retaliatory tariffs on American chicken and pork.
The ongoing dispute regarding tomatoes isn’t new. The U.S. Department of Commerce probed into claims that Mexico was dumping tomatoes at below-market prices post-implementation of the North American Free Trade Agreement in 1996. Although the probe was halted following agreements with Mexico, these accords have faced periodic review over the years. Recently, the U.S. Commerce Department abandoned the latest agreement after a surge in appeals from U.S. tomato growers seeking more robust safeguards against Mexican exports. Guenther highlights that Mexican shipments sometimes evade minimum pricing checks and asserts that Mexico’s cost advantages harm the U.S. industry.
The tomato industry in the U.S. necessitates significant labor, relying primarily on immigrant labor through the H-2A visa system, offering an average wage of $16.98 per hour—a sharp contrast to the wages on Mexican farms, which Richards estimates at a tenth of that rate. While acknowledging Mexico’s cost efficiencies, NatureSweet attributes much of it to favorable climatic conditions, reducing the need for greenhouse systems like heating and cooling. As Skip Hulett from NatureSweet pointed out, environmental factors in agriculture are unmovable.
Lance Jungmeyer from the Fresh Produce Association highlights differences in product types, stating that Florida doesn’t produce the vine-ripened specialty tomatoes that have gained popularity among U.S. consumers. Florida’s reliance on more traditional tomatoes might have accelerated the shift, he suggested. In contrast, Guenther stands by the quality of Florida’s produce.
Adrian Burciaga, who co-owns a Mexican restaurant in Fort Worth, Texas, insists on using Mexican tomatoes in his dishes, likening it to selecting specific wines for superior quality. His establishment requires around 300-400 pounds of these tomatoes weekly and isn’t eager to transition to domestic alternatives, despite potential costs from the looming duty. The fluctuating trade relations add challenges to his business planning, emphasizing the broader industry uncertainty.