The Trump administration accuses Mexico of “dumping” tomatoes on the US — something the US would never dream of doing with the agricultural goods it sends to Mexico (sarc).
The Trump administration continues to escalate its economic war against its largest trade partner, Mexico. In recent weeks alone, Washington has imposed potentially fatal sanctions on two smallish Mexican banks and a brokerage house, which were quietly paused last week; it has implemented a 3.5% tax on the remittance payments US-based migrants, many of them Mexican, send home; and it has escalated its raids on migrants, many of them also Mexican.
Now, to cap things off, Washington just imposed a 17% tariff on US imports of tomatoes, almost all of which come from Mexico. As Bloomberg notes, the move comes just days after Trump unveiled plans to impose a 30% tariff, beginning Aug. 1, on many Mexican products that don’t fall under the USMCA agreement he negotiated in his first term.
The Trump administration accuses Mexican farmers of unfairly “dumping” (i.e. selling at an artificially low price) tomatoes on the US market — something the US would never dream of doing with the agricultural goods it exports to Mexico, if you’ll excuse my sarcasm.
“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. That ends today,” Commerce Secretary Howard Lutnick said in a statement. “This rule change is in line with President Trump’s trade policies and approach with Mexico.”
Mexico’s Sheinbaum government begged to differ, arguing that market share won by Mexican tomato farmers in past decades is a result of “the quality of the product, and not any unfair practice.” She also said the tariff would probably have limited impact on the exports of Mexican tomatoes to the US given the scale of US dependency.
A Long Time Coming
For its part, the Florida Tomato Exchange (FTE), a lobby that represents the state’s growers, packers and shippers and enjoys close ties to the Trump administration, welcomed the move, stating that “the playing field will finally be levelled” for U.S. growers.
The FTE has waited a long time for this moment. The first time it accused Mexican farmers of “dumping” practices was back in 1996, just two years into NAFTA. In response, Mexican farmers agreed to set a floor price on tomatoes in a bid to ensure that US farmers were not being undercut. In return, the US suspended an investigation into the Mexican farmers’ alleged dumping practices.
Since then four rounds of agreements have taken place, the last one in 2019. But the times for normalised trade relations between the US and Mexico appear to be well and truly over.
As with so many of Trump 2.0’s trade policies, the tariffs on Mexican tomatoes are likely to backfire, with the price ultimately being paid by US consumers. Two out of every three tomatoes consumed in the US come from Mexico, according to official figures.
Since the signing of NAFTA in 1994 the market share of US tomatoes has slumped to 30% from 80%, according to the Florida Farm Bureau, while imports of Mexican tomatoes have increased four fold. The tomato trade between the two countries is now worth close to $3 billion.
“There is no way that Florida can supply the local market in terms of quality, quantity and price; impossible,” Antonio Ortiz-Mena, a Mexican expert in geopolitics and professor of international trade at Georgetown University, told BBC Mundo. In addition, “there are U.S. companies that have investments in tomatoes in Mexico, not only because of the low labour costs but, above all, because of the climatic conditions and economies of scale. So they will also be affected.”
Tons of Floridan tomatoes have already gone to waste as a result of Trump’s tariffs and migration crackdown, as WSVN Miami reported in mid-May:
With tariff talks top of mind, South Florida farmers say they’re in trouble. Crops are rotting on the vine and they’re blaming the ongoing trade wars and immigration changes. What does this mean for the future of our food? 7’s Heather Walker investigates.
Perfectly good tomatoes are being plowed over — instead of picked. It’s a sad scene happening in South Florida.
Heather Moehling, President, Miami-Dade County Farm Bureau: “You can’t even afford to pick them right now. Between the cost of the labor and the inputs that goes in, it’s more cost-effective for the farmers to just plow them right now.”
Although the tariffs on Mexico did not came into effect for goods compliant with the United States-Mexico-Canada Agreement, including tomatoes, the threat of tariffs alone was enough to disrupt the U.S. market:
“The Mexican industry exported, in some cases, double and triple the daily volumes to beat being subject to the 25 percent tariff in February and March and the 10 percent tariffs in April. That just devastated our markets in the U.S.,” [Tony DiMare, president of DiMare Homestead, which owns over 4,000 acres of tomato farms in Florida and California told WVSN].
Farmers say President Trump’s tariffs and the threat of tariffs have caused thousands of acres of tomatoes to go to waste because the price to pick and pack them costs more than what the tomatoes are selling for this year.
Changes in immigration are also taking a toll, with many pickers afraid to go to work.
Homestead farm worker: “Many workers have left, others are leaving now… A lot of people are really afraid and sometimes they come, sometimes they don’t come and the harvest is lost because it cannot be harvested, so that’s why so much produce is lost.”
The Trump administration is already aware of the strain its erratic policies are having on the nation’s farmers. In April, U.S. Agriculture Secretary Brooke Rollins announced that her agency is preparing a contingency bailout plan for farmers should the trade wars continue to escalate.
“We are working on that. We are preparing for it. We don’t believe it will be necessary,” Rollins said.
In other words, US citizens could end up paying doubly for Trump’s tariffs, first through higher prices at the checkout and secondly through bailouts to US farmers. Meanwhile, on the Mexican side of the border concerns have been raised that if Trump’s tariffs are effective in bringing down US imports of Mexican tomatoes (a big “IF” for reasons already outlined), one possible beneficiary will be the drug cartels, which Trump claims to be waging total war against.
BBC Mundo (machine translation):
“Mexican tomatoes are going to become cheaper, but the question is how companies are going to deal with this problem. They are going to have to reduce their workforce, they are going to have to rethink how many hectares they are going to plant,” said Faustino Delgado, a leader of the agricultural workers union.
Most of the industry, moreover, is in Sinaloa. The so-called “Sinaloa red pearl” is produced there. Agro-export land coexists alongside land belonging to of one of the most important drug trafficking cartels in the world.
Over the past year, a war between factions of the Sinaloa cartel has put the state on tenterhooks and a curfew is currently in place in the capital, Culiacan. The roads where the tomatoes comes out, in addition, are on the front lines of the battle.
“A tariff like this exacerbates the problems driving Mexican workers to either want to migrate to the US in search of opportunities or to swell the ranks of organized crime,” Ortiz-Mena says.
The potential fallout of a tomato tariff extend far beyond the commercial realm.
Pot, Meet the Mother of All Kettles
Perhaps the maddest — and most maddening — aspect of the Trump administration’s imposition of sanctions on Mexican tomatoes is the stated justification, or pretext, for doing so: namely, that Mexico’s farmers are “dumping” tomatoes on the US market. In doing so, it seeks to paint US famers as victims of underhand market practices by their Mexican competitors.
However, when it comes to dumping (i.e. selling at an artificially low price) agricultural produce on the international markets, no one, with the possible exception of the EU, comes close to the US’ heavily subsidised farmers and Big Ag corporations. For decades the US has destroyed the livelihoods of millions of farmers around the world by unleashing on to the global markets surplus produce at below-cost price.
One of the biggest victims is Mexico. Over the years, the Institute for Agriculture and Trade Policy has published reports tracking the incremental harm US dumping of basic agricultural staples has done to Mexico’s ability to feed itself. From its 2023 report, Swimming Against the Tide: Mexico’s Quest for Food Sovereignty in the Face of U.S. Agricultural Dumping:
In 1994, NAFTA eliminated most of the trade restrictions Mexico had used to protect its farmers from foreign competition, and in 16 of the 28 years since, the U.S has dumped corn, soybeans, wheat, rice and cotton exports into Mexico at prices 5%-40% below what it cost to produce them. In turn, Mexican producers of these crops experienced prices drops of 50%-68% in the 12 years after NAFTA took effect. From 2014 to 2020, U.S. exports of priority food crops came into Mexico at unfairly low prices, undermining the incentives for Mexican farmers to increase production.
The US was able to do this by continuing to subsidize agricultural producers even after NAFTA while Mexico’s government pulled most of its subsidies. Mexico’s political class, in thrall to neoliberal ideas such as economic liberalisation, privatisation and “free” trade, showed scant interest in safeguarding, let alone developing, the country’s internal market. The government had already begun slashing subsidies to Mexican famers over a decade before NAFTA…
Nick Corbishley 