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The United States will impose a 17.5% tariff on Mexican tomato imports starting on Tuesday but said it is optimistic that a deal can be reached to extend a 2013 agreement that suspended a U.S. anti-dumping investigation . The tariff could amount to USD $350 million annually .
“The Department of Commerce remains committed to ensuring that American domestic industries are protected from unfair trading practices ,” Secretary of Commerce Wilbur Ross said in a statement. “We remain optimistic that there will be a negotiated solution.”
In early February, the U.S. Commerce Department said that the United States would resume an anti-dumping investigation into Mexican tomatoes , withdrawing from a suspension agreement that halted the anti-dumping case as long as Mexican producers sold their tomatoes above a pre-determined price . U.S. growers and lawmakers claim the deal has failed.
At the time, the Commerce Department said it was issuing a 90-day notice before terminating the six-year-old agreement.
“As of tomorrow, a tariff of 17.5% will be applied on the value of the product (...) Mexican exporters will be affected, it’s going to affect their financial flows but that is going to be directly transferred to U.S. consumers ,” said Mexican Deputy Economy Minister Luz María de la Mora.
She added that the U.S. measures will remain in place until a new suspension agreement is reached.
“We’re very disappointed but the good news is that negotiations continue, looking for a solution. And we hope that in the coming weeks we can, in fact, reach an agreement ,” said de la Mora .
Mexico exports around USD $2 billion worth of tomatoes to the United States annually, according to de la Mora.
Mexican imports
account for just over half of the U.S. tomato market , according to the Florida Tomato Exchange .
A trade war over tomatoes was prevented twice since the 1990s , most recently in the 2013 deal that put a basic price on Mexican tomatoes sold in the United States while preventing U.S. growers from pursuing anti-dumping charges against Mexican exporters .
Fruit and vegetable growers in the southeastern U.S. had persuaded the Trump administration to impose seasonal anti-dumping duties against Mexican produce in negotiations to update the NAFTA Agreement. But this demand was withdrawn in the final talks over the U.S.-Mexico-Canada trade deal reached last October.
A month later, the Florida Tomato Exchange had petitioned the Commerce Department to terminate the 2013 tomato pact. It argued that the agreement could not be enforced and contained too many loopholes through which Mexican growers could sell their tomatoes at a lower price in the U.S. market , a practice called “ dumping .”
Nevertheless, Wilbur Ross said the United States will refund any tariff deposits if a new deal is reached or if the U.S. International Trade Commission determines there is no injury based on its own independent investigation.
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