Tomato Tariffs Could Cause American Consumers to Pay 50% More for Fresh Tomatoes

Published a year ago via Business Wire

New study from Arizona State University projects tomato prices may rise substantially if the U.S Department of Commerce acts to terminate a longstanding trade agreement

A small group of domestic tomato producers is petitioning the U.S. Department of Commerce to terminate a longstanding trade agreement between the United States and importers of fresh tomatoes from Mexico. The Tomato Suspension Agreement, which has been in place in various forms since 1996 and was most recently renegotiated in 2019, ensures fair trade practices and a stable market for imports of fresh tomatoes from Mexico to the United States. Without the 2019 Suspension Agreement in place, NatureSweet, the #1 snacking tomato brand headquartered in Texas, and countless other companies would face tariffs of more than 20 percent on the import of fresh tomatoes into the United States.

“Tomatoes imported from Mexico generate economic and social value far beyond their retail price,” says Skip Hulett, Vice President and General Counsel for NatureSweet. “They support jobs, businesses, and livelihoods in local communities on both sides of the border. Terminating the suspension agreement will come at a cost that far outweighs the benefits for consumers, retailers, and agricultural workers.”

A recent study authored by Dr. Tim Richards, Chair of Agribusiness in the W. P. Carey School of Business at Arizona State University, analyzed the potential effects if the suspension agreement were to end. The findings demonstrate how both consumers and grocery retailers in the United States will be greatly impacted. The study concludes that:

  • Consumers can expect to pay prices for fresh tomatoes that average 50% higher than they do today.
  • Grocery retailers would earn almost $7.5 billion less in revenue.
  • Texas would suffer over $4.53 billion in lost economic activity, while Arizona would see almost $3.40 billion in lost economic activity.
  • Across Texas and Arizona, more than 54,000 jobs are supported by Mexican tomato imports — and those jobs could disappear if the TSA is terminated.

“Free and fair trade is critical to NatureSweet’s purpose which is to transform the lives of agricultural workers in North America,” adds Hulett. “We provide year-round jobs, pay our employees almost 40% above the median wage for agricultural workers, we help our workers obtain access to improved medical care services, education programs, develop career paths, and obtain opportunities for advancement. This tariff would punish companies like NatureSweet, which are doing the right thing.”

Importantly, importers of fresh tomatoes from Mexico have played by the rules. The Department of Commerce in its own compliance audits, including what was published in the Federal Register as recently as today October 10, 2023, has found zero consequential violations of the agreement by Mexican growers. As a testament to the importance of the 2019 Suspension Agreement, a group of more than 400 companies representing 32 states, including NatureSweet, are urging the U.S. Department of Commerce to preserve the 2019 Suspension Agreement and reach a resolution that allows economies on both sides of the border to continue thriving.

About NatureSweet® (NS Brands, Ltd.)

NatureSweet® is the single-source solution for greenhouse-grown vegetables and is the #1 best-selling brand in snacking tomatoes. The largest vertically integrated agriculture company in North America, NatureSweet guarantees great tasting produce year-round, both organic and conventional. Our vegetables are carefully grown, harvested, and packaged by more than 6,000 directly employed company Associates. NatureSweet tomatoes, cucumbers, and sweet peppers are handpicked at the peak of freshness and sold at major supermarket retailers throughout the United States, Mexico, and Canada. NatureSweet is dedicated to having a positive social, environmental, and economic impact within our communities, and our commitment is to transform the lives of agricultural workers throughout North America. This work, as well as our efforts regarding sustainability, have led us to earn B Corp, Fair Trade, and the Equitable Food Initiative (EFI) certifications. NatureSweet, headquartered in Texas with facilities in Arizona and Mexico, is the largest Controlled Environment Agriculture company in the world to be B Corp, Fair Trade, and EFI certified.

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