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After eggs, tomatoes are getting costlier in the US. Here’s why
Amid a rise in food prices in the United States, Mexican tomatoes are being slapped with a 17% tariff, the U.S. Dept. of Commerce announced.
Amid a rise in food prices in the United States, Mexican tomatoes are being slapped with a 17% tariff, the U.S. Dept. of Commerce said on July 14. The department announced that it was withdrawing from a 2019 agreement that suspended tariffs on tomatoes that were imported from Mexico.
“Now that the 2019 Agreement is terminated, Commerce is issuing an antidumping duty order, resulting in duties of 17.09 percent on most imports of tomatoes from Mexico. Antidumping duties are calculated to measure the percentage by which Mexican tomatoes have been sold in the United States at unfair prices,” the department said in its announcement.
This could now affect a lot of grocery store tomatoes. Tomatoes are grown in Florida too, but 70% of fresh tomatoes confused in the United States are imported. The majority of them are brought from Mexico, said David Ortega, a food economist at Michigan State University, per Time Magazine.
It is important to note that this price increase comes at a time when Americans are already tired of the growing inflation. “This is one of the most widely consumed fruits or vegetables in the U.S., and it’s important to put it in the context of consumers’ experience with food prices over the past few years,” Ortega explained. “They’re stretched thin, and even a few cents adds up, especially for low-income households.”
Why are tomato prices rising?
Back in 1996, US farmers complained to a trade court that Mexican farmers were “dumping” tomatoes, which meant they were selling tomatoes to the US at an artificially low price. Following the complaint, Mexican farmers agreed that they would set a floor price on tomatoes so that US farmers were not being undercut. As a result, the US paused an investigation into whether farmers in Mexico were really unfairly dumping tomatoes in the US market.
As many as four times since then, Mexico and the US have come to new agreements about the floor price. However, farmers have continued to allege that Mexico has not stopped engaging in unfair trade practices. The Florida Farm Bureau says that since 1996, the market share of US tomatoes has decreased to 30% from 80%, but Mexican tomato imports have risen 400%.
In April, the Commerce Department first announced that it was withdrawing from the truce, which was known as the Tomato Suspension Agreement. The department also said that the tariffs on Mexico tomato imports would be 20.9%. Later, the tariff saw a slight reduction in Commerce Secretary Howard Lutnick’s July 14 announcement formalizing the plans to withdraw. “For far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes,” he said at the time. “That ends today.”
Meanwhile, Ortega said that consumers in the US may not witness the effect of the new tariff until the fall. This is because at present, tomatoes are in season in the US, and people generally rely on imported tomatoes more heavily in the winter.
The tomato price rise comes after egg prices in the US soared to record highs earlier this year. Consumers were paying as much as $10 per dozen.
