Tomato prices set to rise sharply as trade agreement with Mexico ends

In July 2025, the United States is facing a significant change in its tomato import policies due to the impending expiration of a critical trade agreement with Mexico. The Tomato Suspension Agreement, which was designed to regulate tomato pricing and avoid hefty tariffs, is set to end on July 14. This agreement allowed Mexican tomato exporters to sell their products in the U.S. without facing over 20% tariffs, provided they adhered to specific pricing and regulatory rules. However, the U.S. Department of Commerce announced that it intends to terminate this agreement, claiming it has not adequately safeguarded American tomato growers from unfair competition posed by Mexican imports. The termination of the agreement will lead to import tariffs of over 20% on fresh tomato exports from Mexico, which is particularly concerning given that Mexican tomatoes account for as much as 93% of U.S. imports during periods of lower domestic production. NatureSweet Ltd., one of the largest tomato importers in North America, announced it may need to raise prices by nearly 10% to absorb these increased costs associated with the looming tariffs. The company emphasized the low-margin nature of its business and stated that it cannot realistically absorb the full extent of the tariffs without impacting consumer prices. The implications of these changes are widespread, as U.S. retailers like Walmart, Kroger, and Whole Foods heavily rely on Mexican tomato imports. While Walmart has committed to keeping fresh produce accessible despite the changing environment, concerns remain regarding how the tariff will affect the supply chain and ultimately consumer prices. Predictions indicate that prices for tomatoes could increase significantly, with some experts warning of potential rises up to 50%. The Fresh Produce Association of the Americas has voiced alarm regarding the impact on the ability of U.S. companies to supply consumers with affordable vine-ripened tomatoes. There are calls for re-negotiating the terms of the tomato import agreement to benefit both U.S. growers and Mexican suppliers. Advocates argue that a new agreement should focus not solely on tariffs but rather on fostering innovation in the industry, assisting domestic growers in enhancing their competitive stance while meeting consumer demand for tomatoes. Until such a deal is reached, the expiration of this agreement represents a precarious situation for both the food supply chain and tomato pricing across the United States.