Mexican tomato industry struggles under Trump's new tariff

The Trump administration imposed a 17% tariff on fresh tomatoes imported from Mexico, effective July 14, 2021. This decision has adversely affected the Mexican agriculture sector, especially for growers who export tomatoes to the United States. The Mexican tomato industry, which supplies the largest share of fresh tomatoes to U.S. consumers, now faces significant financial challenges due to this new import tax. Major exporters like Veggie Prime, based in Ajuchitlan, Mexico, have been grappling with the immediate impacts of the tariff as they strive to maintain profitability amid increased costs. Veggie Prime has established a contract with Mastronardi Produce to supply fresh tomatoes until 2026 and has resisted passing the full tariff cost to consumers in the short term. In the tariff's initial weeks, Veggie Prime absorbed the entire charge but saw a slight adjustment when Mastronardi agreed to raise prices by 10%. Despite this, Atri has expressed concerns about whether the increased costs will eventually be passed on to retail clients. Experts predict that the tariff could result in a 5% to 10% decrease in tomato exports, which totaled over $3 billion in 2020. This decline may also lead to significant job losses, with estimates suggesting that around 200,000 jobs could be at risk if exports drop as predicted. In response to the import tax, the Mexican government is evaluating alternative markets for tomato exports, including Japan, but there are doubts regarding feasibility due to heightened transportation costs. In a proactive measure, Veggie Prime is also exploring the cultivation of peppers as an alternative crop to diversify their production amid changing market dynamics. As time progresses, stakeholders await a scheduled review of the tariff in two months, hoping for a reconsideration of the measures impacting their livelihoods.