US Commerce Secretary Howard Lutnick says US farmers have been ‘crushed’ by unfair trade practices.
The administration of United States President Donald Trump has announced a 17 percent tariff on fresh tomatoes from Mexico, scrapping a three-decade-old agreement to spare the produce from anti-dumping duties.
The Trump administration’s withdrawal from the agreement on Monday came as the clock ticked down for Mexico to reach an across-the-board trade deal with the US by August 1 or face a general tariff of 30 percent on its goods.
“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,” US Secretary of Commerce Howard Lutnick said in a statement.
“That ends today. This rule change is in line with President Trump’s trade policies and approach with Mexico.”
The Commerce Department had in April announced its intention to exit the agreement in 90 days, saying it had “failed to protect US tomato growers from unfairly priced Mexican imports”.
Mexico supplies nearly 70 percent of tomatoes in the US, up from about 20 percent in 1994, according to the Florida Tomato Exchange.
The Tomato Suspension Agreement, which was first signed in 1996, put a hold on duties stemming from a US trade court decision that found Mexican exporters were selling their produce at artificially low prices.
Under the agreement, the US agreed to suspend the tariffs provided that Mexican producers did not sell their produce below agreed-upon “reference prices.”
The two sides renewed the deal on four occasions, most recently in 2019.
In a joint statement, Mexico’s economy and agriculture ministries condemned the move as “unjust” and “against the interests not only of Mexican producers but also of the US industry”.
“The gains made by Mexican fresh tomatoes in the U.S. market are due to the quality of the product and not to any unfair practices,” the ministries said, adding that the tariffs would “only hurt American consumers’ wallets, as it will be impossible to replace Mexican tomatoes.”
Democratic politicians also criticised the tariff, warning of higher prices and job losses.
“Donald Trump’s reckless trade war is raising prices, threatening our economic growth and killing jobs,” Arizona Governor Katie Hobbs, a Democrat, said in a statement.
“With his latest senseless decision to leave the Tomato Suspension Agreement, he is threatening to kill over 50,000 jobs between Arizona and Texas and forcing Arizonans to pay more at the grocery store, all to benefit Florida farmers. Arizona businesses and families will pay the price for this tax hike that is the latest step in the administration’s reckless trade war.”
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