Tomato becomes a luxury: What the US–Mexico tariff fight means for your grocery bill
Tomato prices may rise as US imposes tariffs on Mexican imports, ending a decades-old trade deal and sparking uncertainty in produce markets.
Warnings are coming from trade experts that the price of tomatoes and other produce imported from Mexico could soon rise at the grocery store, as the White House upends trade with the U.S.’s southern neighbor. Over the weekend, President Trump announced that imports from Mexico would be subject to a 30 percent tariff.
The news of the higher tariff rate comes as the White House rushes to inform key trading partners of the duties their imports will face starting August 1. Mixed messaging from administration officials has made it difficult for world leaders and their trade teams to determine whether the White House intends to continue negotiating or if these are the final rates, following a series of delays since the initial rollout on April 2.
CNN reported that in April, the U.S. Department of Commerce—led by close Trump ally Secretary Howard Lutnick—withdrew from the Tomato Suspension Agreement, which had governed trade of the fruit since 1996. The rationale given by the Commerce Department centered on the agreement’s failure to “protect US tomato growers from unfairly priced Mexican imports.” The withdraw took affect on Monday, July 14, with trade experts already warning that higher prices might be on the horizon.
The reliance on Mexico’s tomato exports
Since the US has chosen to withdraw, tariffs as higer as 20.9 percent could be applied to tomatoes coming in from Mexico. According to the American Action Forum, around a third of all tomatoes consumed in the US are grown domestically, meaning two thrirds are imported. Across import markets, the same source found that around 90 percent come from Mexico, or around 61 percent of all tomatoes consumed.
The US Department of Agrilcture’s weekly produce report from July 9, found that prices were “much higher” than the previous weeks. Nevertheless, prices remain below where they were at the same point last year. The Bureau of Labor Statitsics’ Consumer Price Index has tracked a 6 percent decrease in tomatoe prices over the last year.
How much could tomato prices increase by?
The increase in price will depend on how much of the duty is passed on to consumers. According to the American Action Forum (AAF), if imports from Mexico remain at 2024 levels, the US federal government would collect approximately $346 million in tariff revenue, based on a 21 percent tariff. This cost would be shared among shoppers, grocers, distributors, and importers.
The organization estimates that the tariffs could raise prices by about 8 cents per pound, with Jacob Jensen of the AAF estimating that consumers will see prices rise by around 10 percnet. It is unlikely that households will absorb this cost increase entirely, and regional price differences are expected depending on the availability and concentration of imported tomatoes throughout the year.
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