Mexico Raises Tomato Export Prices to Counter U.S. Tariffs

In a significant move to address escalating trade tensions with the United States, Mexico has introduced minimum export prices for fresh tomatoes, effective August 8, 2025, as published in the Mexican federal gazette. This strategic response follows the U.S. Commerce Department’s decision in July 2025 to withdraw from the 2019 Tomato Suspension Agreement and impose a 17.09% anti-dumping duty on Mexican tomato imports. The new pricing structure aims to stabilize trade relations, secure market access, and counter U.S. allegations of unfair pricing practices, while navigating a broader protectionist agenda under the Trump administration.

Background of the U.S.-Mexico Tomato Trade Dispute

The U.S.-Mexico tomato trade dispute dates back to the 1990s, when American growers, primarily in Florida, accused Mexican producers of "dumping"—selling tomatoes in the U.S. at below-market prices, which they claimed undercut domestic producers. To address these concerns, the U.S. and Mexico entered into a series of suspension agreements starting in 1996, with the most recent in 2019. These agreements set minimum reference prices for Mexican tomato exports to avoid anti-dumping investigations, ensuring stable trade relations.

However, in April 2025, the U.S. Commerce Department announced its withdrawal from the 2019 agreement, citing ongoing concerns from U.S. growers, particularly the Florida Tomato Exchange, that Mexican tomatoes were still being sold at unfairly low prices. The decision led to the reinstatement of a 17.09% anti-dumping duty, effective July 14, 2025, with plans for an increase to 20.91% by mid-July, according to some sources. This move has reignited a decades-long trade conflict, with significant implications for both economies and consumers.

Mexico’s Response: Minimum Export Prices

To mitigate the impact of the U.S. tariffs and restore full access to the American market, Mexico’s government issued a decree establishing minimum export prices for fresh tomatoes. The pricing structure, effective immediately, includes:

These price floors represent significant increases, with round tomatoes seeing a nearly 40% jump and premium varieties like cherry and grape tomatoes rising by approximately 26%, as noted by Juan Carlos Anaya of Mexico City’s Agricultural Markets Consulting Group. The Mexican government argues that these measures prevent “price distortions” and align export prices with fair market values, addressing U.S. concerns about dumping while protecting Mexican growers from escalating duties.

Georgina Felix, director of operations at the Arizona-based Fresh Produce Association of the Americas, emphasized that the price floors are a proactive step to avoid further increases in anti-dumping duties, stating, “The Mexican government is trying to help growers avoid an increase in anti-dumping duties in the future.”

Economic and Political Stakes

Tomatoes are a cornerstone of Mexico’s agricultural exports, with the U.S. market accounting for over $2.8 billion annually. Mexico supplies approximately 93% of U.S. fresh tomato imports, making it the dominant supplier, particularly during winter months when domestic production in states like Florida and California cannot meet national demand. In 2023, the U.S. imported 4.4 billion pounds of fresh tomatoes, compared to 2.2 billion pounds produced domestically, highlighting the critical role of Mexican imports.

The reimposition of U.S. tariffs threatens to disrupt this supply chain, with potential ripple effects on both sides of the border. The American Action Forum estimates that the 17.09% tariff could increase U.S. tomato prices by about 8 cents per pound, translating to a 7-10% rise in retail costs. Some projections, such as those from the Fresh Produce Association of the Americas, warn of price increases as high as 50% if supply shortages intensify.

For U.S. consumers, who consume nearly 20 pounds of fresh tomatoes per capita annually, these price hikes could add significant costs to grocery bills, particularly for tomato-heavy products like salsas, sauces, and salads. Democratic lawmakers, including Arizona Senator Ruben Gallego, have labeled the tariffs a “tomato tax,” arguing that they disproportionately burden working families.

On the Mexican side, the tariffs and reduced planting due to trade uncertainty could lead to job losses in farming, packing, and distribution. Mexican growers are already scaling back planting for the autumn-winter season, the peak export period, which could exacerbate supply shortages and further drive up prices. Mexico’s ministries of Economy and Agriculture have called the U.S. tariffs “unfair,” asserting that the quality of Mexican tomatoes, not unfair pricing, drives their market success. They remain optimistic about negotiating a resolution, as they have in past disputes.

Broader Trade War Context

The tomato dispute is a microcosm of broader U.S.-Mexico trade tensions under President Donald Trump’s protectionist policies. Trump has threatened a 30% blanket tariff on all Mexican goods starting in August 2025, a move that could further strain bilateral relations. The tomato tariffs align with this agenda, with U.S. Commerce Secretary Howard Lutnick stating, “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.”

U.S. tomato growers, particularly in Florida, have hailed the tariffs as a victory, with the Florida Tomato Exchange calling them “an enormous victory for American tomato farmers.” However, U.S. importers and distributors, such as Arizona-based Chamberlain Distributing, warn of significant costs. Jaime Chamberlain noted that distributors may have to absorb the tariffs upfront, increasing financial strain, and that sourcing tomatoes from other countries like Canada or the Caribbean cannot match Mexico’s volume.

Mexico has signaled potential retaliatory tariffs on U.S. agricultural exports, which could impact American companies like Tyson and Smithfield, escalating the risk of a broader trade war.

Implications for Supply Chains and Consumers

The termination of the Tomato Suspension Agreement and the introduction of tariffs have raised concerns about supply chain disruptions and food security. The U.S. relies heavily on Mexican tomatoes to ensure year-round availability, as domestic production is seasonal and insufficient to meet demand. A 2025 USDA forecast indicates that Mexico’s reduced planting could tighten supply during the critical autumn-winter season, potentially leading to shortages and higher prices.

U.S. businesses involved in tomato storage, distribution, and retailing, which support approximately 47,000 jobs and generate over $8 billion in economic activity, face uncertainty. Skip Hulett, chief legal officer for U.S. tomato importer NatureSweet Ltd., noted that the company may need to raise prices by nearly 10% if trade disruptions persist, impacting consumers and the broader supply chain.

Ongoing Negotiations and Future Outlook

With a 90-day window before broader U.S. tariff hikes take effect, both nations are under pressure to negotiate a new trade agreement. Mexican President Claudia Sheinbaum has emphasized continued dialogue to resolve the impasse, while the U.S. has expressed openness to a deal that addresses domestic growers’ concerns. Past disputes have often led to new suspension agreements, suggesting a potential path forward, but the current protectionist climate complicates negotiations.

The outcome of these talks will shape the future of U.S.-Mexico agricultural trade, with implications for farmers, businesses, and consumers. For now, Mexico’s minimum export prices are a calculated step to stabilize the market, but the long-term resolution remains uncertain as both sides navigate economic and political pressures.

Conclusion

Mexico’s decision to set minimum export prices for fresh tomatoes is a strategic effort to counter U.S. anti-dumping tariffs and maintain access to a critical market. While the move addresses U.S. allegations of unfair pricing, it risks higher consumer prices and supply chain disruptions. As trade tensions simmer, the tomato dispute underscores the delicate balance between protecting domestic industries and maintaining affordable, reliable food supplies in an interconnected global economy. Ongoing negotiations will determine whether both nations can find common ground or if the dispute will escalate into a broader trade conflict.