Tomato prices likely to jump as Mexico tariffs go into effect
Why it matters: Americans buy a lot of tomatoes, and this tariff will likely affect the cost of everything from salsa to Caprese salad.
Here's what to know:
What is the Mexico tomato tariff?
State of play: The U.S. Department of Commerce in April announced the termination of a nearly 30-year-old trade agreement between the U.S. and Mexico.
"With the termination of this agreement, Commerce will institute an antidumping duty order on July 14, 2025, resulting in duties of 20.91% on most imports of tomatoes from Mexico," the department said in a statement.
What they're saying: "Antidumping and countervailing duty orders provide American businesses and workers with a mechanism to seek relief from the harmful effects of the unfair pricing of imports into the United States," the Commerce Department said.
"Foreign companies that price their products in the U.S. market below the cost of production or below prices in their home markets are subject to antidumping duties."
Will tomatoes cost more for U.S. consumers?
The other side: Many experts have said that the cost of import taxes are often shared by both the importer and the consumer.
And "the trade dampening effects of AD duties persist over time," one 2020 study published in the Journal of International Economics found.
By the numbers: The U.S. Agriculture Department estimated in June that Mexico's tomato exports would decrease 5% this year in response to the new levies.
"It's possible that the price of tomatoes goes up for the short term," Agriculture Secretary Brooke Rollins told reporters this month. But in the longer term, ensuring "that our international partners are being fair and following the rules and ensuring that they're meeting their obligations is paramount."
Consumer prices could jump by about 10%, Timothy Richards, a professor of agribusiness at Arizona State University, told CNN.
Richards added that demand may fall by 5% as a result of the tariffs.
Major U.S. tomato importer NatureSweet told Fox News that it may raise prices by nearly 10% when the trade deal ends.
CEO Rodolfo Spielmann told Bloomberg News that, given the company's slim profit margins, "there's no scenario" where the company can "absorb those tariffs."
Teresa Razo, owner of two Argentine-Italian restaurants in Southern California, told CNN that she gives it "three months" before her businesses go bankrupt.
"Somebody that would dine out three times a week, maybe now they'll do it once or twice because we have to increase our prices," she said.
Will the tomato taxes impact jobs?
Andrew Muhammad, an agricultural policy professor at the University of Tennessee's Institute of Agriculture, told Bloomberg News that reducing imports is likely to eliminate tomato pipeline jobs.
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