Few things represent summer quite like tomatoes, when they reach their peak harvest season and overflow grocery displays and farmer’s market stands. But the end of a decades-long tariff policy this month could lead to higher prices for the staple summer food.
That’s because a new tariff is going into effect on tomatoes imported from Mexico starting on July 14, as the U.S. ends a nearly 30-year-old trade agreement with Mexico that allowed importers to avoid certain tariffs on the product. The U.S. Department of Commerce announced the termination of the agreement in April, which will result in a 20.91% import duty on most fresh tomato imports from Mexico, according to a statement from the department.
“If these tariffs stay in place for a considerable amount of time, a few weeks to a few months, we would expect prices to go up,” said food economist and Michigan State University professor David Ortega.
It’s just the latest in a string of aggressive tariff policies introduced by the second Donald Trump administration, with the president arguing it will balance trade deficits and lead to a stronger domestic manufacturing industry. Many economists have expressed varying degrees of skepticism about these promises, while U.S. consumers are experiencing price hikes on a range of imported grocery items as various policies take effect.
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Tomatoes are among Mexico’s top five agricultural exports, according to the U.S. Department of Agriculture, with 93% of exports going to the U.S. In a June report, the department projects the new tariff will likely impact the amount of tomatoes imported to the U.S. and lead to higher prices, projecting imports to come in at just under $3 billion − 5% lower than in 2024.
“Exporters are expected to seek markets where their produce benefits from a low or zero tariff, particularly for the autumn-winter crop, to offset tariffs on tomatoes exported to the United States,” the report said.
Ortega said there is a lot of uncertainty surrounding tariffs and their potential impacts, making specific projections of cost increases on individual items like tomatoes difficult. But if this 20.91% import duty stays in place, he estimates costs could rise anywhere between the high single digits, like 7-8%, or possibly in the low teens.
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“We would expect to see those increases in the fall and winter,” he said. “That’s when there is less production here in the U.S. and we lean quite heavily on Mexico for fresh tomatoes.”
Ortega said there is a lot of uncertainty surrounding tariffs and their potential impacts, making it difficult to project specific cost increases for individual items, such as tomatoes. But if the 20.91% import duty remains in place, he estimates that costs could rise anywhere between high single digits, such as 7-8%, or possibly in the low teens.
Overall, 15% of the U.S. food supply is imported, including 32% of fresh vegetables and 55% of fresh fruit, according to the Consumer Federation of America, citing the U.S. Food and Drug Administration. According to the most recent USDA data from 2022, about 69% of all fresh tomatoes available to U.S. consumers are imported, with Mexico as the leading source.
A group of more than 30 chambers of commerce and cross-border trade organizations sent a letter to the U.S. Department of Commerce on July 11, urging the government to negotiate a new agreement rather than withdrawing from the agreement entirely. They warned that termination of the agreement will likely have “widespread repercussions on the U.S. economy, affecting agriculture, warehousing, logistics, grocery, and restaurant industries.”
“We are concerned that withdrawing from the Agreement – at a time when the business community is already navigating significant trade uncertainty – could lead to retaliatory actions by our trading partners against other commodities and crops that could create further hardship for U.S. businesses and consumers,” the letter said.
Kathryn Palmer is a national trending news reporter for USA TODAY. You can reach her at kapalmer@usatoday.com and on X @KathrynPlmr.
This article originally appeared on USA TODAY: Are tomato prices rising? Mexican import tariffs may hike costs
