Greenhouse growers take aim at Trump's 'tomato tax' on Mexican imports

CNBC

22-07-2025

When the Trump administration announced a new 17% tariff on Mexican tomatoes, Florida-based growers celebrated the win. They'd pushed for years to end a trade agreement that they said failed to keep Mexican imports from flooding the market.
But greenhouse growers, importers and industry groups in Arizona and Texas are blasting the Commerce Department's withdrawal from the agreement, warning that it could raise prices and cost U.S. jobs.
"There has to be a better way of doing business than just putting duties on products that the consumers want," said NatureSweet CEO Rodolfo Spielmann, who grows greenhouse tomatoes in Arizona and Mexico.
Since President Donald Trump took office in January, he's waged a sweeping trade war to promote domestic industries and specific political demands. Earlier this month, he threatened to impose a 30% tariff on Mexico for allegedly failing to dismantle drug cartels. But the tomato levy is distinct. It stems from the termination of a nearly 30-year-old trade agreement specific to Mexican tomatoes.
Growers like Spielmann hoped — and still hope — the agreement would be renegotiated instead. Because NatureSweet works on both sides of the border, he says it's impossible to scale back Mexican operations without also hurting domestic ones.
The footprint of NatureSweet's Arizona greenhouse could hold 30 football fields, Spielmann said. The company, whose tomatoes are primarily sold in grocery stores, planned to more than double its capacity in the United States, in response to growing demand and a desire to innovate. But it has now put that expansion on hold, he said, because of the change in trade policy.
He says the new tariff will support Florida growers, who mostly plant in open fields, at the expense of everyone else, including consumers, who've grown accustomed to enjoying a wide variety of tomatoes grown in greenhouses year-round.
"We understand that there's a need to protect the Florida tomato production, but also we should be protecting the total U.S. tomato production," Spielmann said.
Moving more operations to the U.S. would present hurdles for NatureSweet. The climate in Mexico is better for growing tomatoes, he explained. And the partial-year H-2A visa program for farmworkers doesn't account for greenhouse operations that need employees for a full year.
It would "take years and a lot of money" to transfer more greenhouses to the U.S., said Tom Stenzel, executive director of the Controlled Environment Agriculture Alliance, whose members include greenhouse tomato growers with operations in the U.S., Mexico and Canada.
Economists have warned that the new tomato tax could mean price increases of up to 10%, harming both consumers and restaurants that rely on tomatoes. Industry groups that represent companies that distribute Mexican tomatoes in the U.S. say their workers are now at risk.
"There is such a wide selection of tomatoes, and there's so many different factors that go into bringing all those different varieties to the store shelf," said Dante Galeazzi, CEO and president of the Texas International Produce Association, which represents warehouses handling imported produce.
The White House did not respond to questions but referred NBC News to a statement Commerce Secretary Howard Lutnick gave last week when he announced the end of the trade agreement. "Mexico remains one of our greatest allies, but for far too long our farmers have been crushed by unfair trade practices," he said.
Critics say the trade agreement's safeguards didn't prevent Mexican tomatoes from being "dumped," or being sold at unfairly low prices, in the U.S., despite being renegotiated several times in an effort to help level the playing field.
"People say, 'you're protectionist,'' said Tony DiMare, president of DiMare Fresh, which has operations in Florida and California. "You're darn right I am." The U.S. needs "boundaries and guidelines and trade laws to keep these countries in check," he said.
The number of family farms has dwindled in recent years, according to Robert Guenther, executive vice president of the Florida Tomato Exchange, which spearheaded the original trade case against Mexican imports. Mexican tomatoes now comprise roughly 70% of the tomatoes consumed in the U.S.
"We're talking about 100 years of domestic tomato supply that we don't want to see go away and this will help," he said. The Commerce Department's decision to impose anti-dumping duties is in line with tariffs imposed on other products, he said.
Political leaders and lawmakers from both sides of the aisle in Texas and Arizona aren't convinced that the tomato tax will ultimately benefit the U.S. A statement from Arizona Gov. Katie Hobbs, a Democrat, cited a Texas A&M study estimating that nearly 50,000 jobs in Arizona and Texas are tied to the import of tomatoes, jobs she said are now at risk.
"Donald Trump's reckless trade war is raising prices, threatening our economic growth and killing jobs," she said.
In June, four Republican lawmakers in Arizona and Texas warned against abandoning the agreement in a letter to Lutnick. "This agreement has safeguarded American jobs, stabilized markets, and driven agricultural innovation without burdensome government interference," they wrote.
The Republican-dominated Legislature in Texas passed a resolution opposing the Trump administration's withdrawal from the agreement.
Texas Gov. Greg Abbott, a staunch Trump ally, signed it last month.