Guacamole is currently Evaded from customs. However, salsa might not share the same fate.
President Donald Trump has Threatened Tariff Mexican avocados. Following this, the US government plans to implement a nearly 21% duty on fresh Mexican tomatoes starting July 14th. Such duties, akin to tariffs, are taxes on imports affecting the £4 billion worth of tomatoes the US imports from Mexico each year.
Proponents argue this measure will assist in revitalizing the US tomato industry, where import taxes are diminishing, and ensure the produce consumed in the US is also domestically grown. According to the Florida Tomato Exchange, Mexico currently supplies about 70% of the US tomato market, up from 30% two decades ago.
“Without a level playing field regarding fair pricing, the domestic industry for fresh tomatoes will not survive much longer,” stated Robert Gunter, executive vice president of the trade group. Florida and California are the primary tomato producers in the United States, although most of California’s crops are processed into sauces and other products.
Opponents argue that this duty will further inflate prices for fresh tomatoes for consumers. Naturesweet, a San Antonio-based company that cultivates tomatoes In Mexico, stated that if the decision is upheld, they will face millions in extra costs each month.
“We continually look for ways to adapt and streamline our operations, but the truth is we’re always working efficiently,” remarked Skip Hulett, CEO at Naturesweet. “Produce isn’t a large business. You have to decide which costs you can absorb, but these added expenses will ultimately be passed on to consumers.”
Tim Richards, a professor at Morrison Agribusiness School at Arizona State University, anticipates that retail tomato prices in the US could rise by approximately 10.5% if the duties are imposed.
Last month, the Mexican government expressed confidence in its ability to negotiate around the issue. However, if the tomato tax takes effect, Mexican President Claudia Sheinbaum suggested her country might retaliate with duties on US chicken and pork imports.
The conflict over tomatoes has a lengthy history. In 1996, shortly after the implementation of the North American Free Trade Agreement, the US Department of Commerce investigated claims that Mexico was dumping tomatoes at artificially low prices into the US.
The US government agreed to suspend this investigation if Mexico adhered to certain guidelines, including selling tomatoes at specified minimum prices. Since then, contracts have been regularly reviewed, with both parties consistently reaching agreements to avoid duties.
However, last month, the Commerce Department announced the termination of its latest contract, citing widespread feedback from US tomato producers seeking better protection against Mexican imports.
Gunter from the Florida Tomato Exchange noted that despite regulations requiring Mexican exporters to charge the lowest price, there are loopholes since freight is only subject to random checks. Moreover, Mexican farms can grow tomatoes 40% to 50% cheaper due to lower land and labor costs, along with cheaper inputs like seeds and fertilizers.
Tomatoes are labor-intensive crops, and the US industry heavily relies on migrant workers through the H-2A Visa program. Under this program, farmers are required to pay workers an average of $16.98 per hour, whereas Richards estimates that workers on Mexican tomato farms earn merely a fraction of that.
NatureSweet acknowledges that growing tomatoes in Mexico is more economical but attributes it largely to climate conditions. The company’s greenhouses in Mexico do not require artificial lighting, heating, or cooling, thanks to the favorable year-round weather.
“We can shift some industries, but we cannot transfer climate-dependent agriculture,” Hallett mentioned.
Lance Jongmeyer, president of the Association of Fresh Agricultural Products, representing Mexican tomato importers, asserted that Florida consumers increasingly seek out tomatoes they can rely on. He emphasized that Florida tomatoes are often harvested while still green and shipped to warehouses where they ripen.
“Florida doesn’t produce the specialized varieties that consumers desire, yet they still seek protection,” Jongmeyer noted. “Their declining market share can largely be attributed to their own decisions.”
Gunter contested this perspective, stating, “If you pit Florida tomatoes against Mexican tomatoes, I believe the former will not withstand taste tests.”
Adrian Burciaga, co-owner of Don Artemio, an upscale Mexican restaurant in Fort Worth, Texas, expressed reluctance to switch to a US supplier. He draws a comparison to fine wine; if he desires a premier Cabernet Sauvignon, he sources it from Napa, California, and similarly prefers tomatoes from Mexico for their nostalgic flavor.
“We understand the unique flavors they bring to salsas and moles. We refuse to compromise on taste,” Burciaga stated.
His restaurant utilizes 300-400 pounds of Roma tomatoes from Mexico each week, and currently pays $19 for a 25-pound box. Although he does not sense the rising costs yet, he feels trapped by the situation.
Burciaga mentioned that potential tomato duties and Trump’s threats to impose suspended 25% tariffs on numerous other products from Mexico complicate his business operations.
“The uncertainty affects us significantly. We have set budgets for our small and medium-sized restaurant. While we can anticipate price increases in six months, we can’t foresee these adjustments. How do we plan or respond?” he articulated.
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Contributed by AP reporter Maria Verza from Mexico City.
Source: apnews.com