Trump will slap 30% tariffs in Mexico and the EU starting August 1st
President Donald Trump wrote to leaders of Mexico and the European Union, saying they hadn’t done enough to leave the new tariffs.
- The new 20.91% tariff on Mexican tomatoes is expected to begin on July 14th and end the nearly 30-year trade agreement.
- Economists predict that the tariff could raise US tomato prices, particularly during fall and winter.
- Mexico is the leading supplier of tomatoes to the US, exporting 93% of its crops, making up the majority of US tomato consumption.
Few things represent summer like tomatoes. Tomatoes reach peak harvest season and overflow grocery displays and farmers’ market stands. But the end of decades of tariff policy this month could lead to higher prices for staple summer food.
This is because new tariffs have been in place on tomatoes imported from Mexico since July 14th, as the US has ended its nearly 30-year trade agreement with Mexico, allowing importers to avoid certain tariffs on their products. The US Department of Commerce announced the end of the contract in April. As a result, a 20.91% import duties will be obtained on most fresh tomato imports from Mexico, according to a department statement.
“We expect these tariffs to go up for a considerable amount of time, weeks or months,” said Professor David Ortega of Michigan State.
This is the latest in a series of aggressive tariff policies introduced by the second Donald Trump administration, which the president argues will balance the trade deficit and will strengthen the domestic manufacturing industry. While many economists have expressed varying degrees of skepticism about these promises, US consumers have experienced rising prices for various imported grocery items as different policies take effect.
According to the US Department of Agriculture, tomatoes are one of Mexico’s top five agricultural exports, with 93% of exports being sent to the US in a June report, so the department predicts that new tariffs will affect the amount of tomatoes imported into the US, and that imports will likely be less than $300 million than in 2024.
“Exporters are expected to seek a market that will benefit from low or zero tariffs in produce, particularly for fall and winter crops, to offset tariffs on tomatoes exported to the United States,” the report said.
Ortega said there is a lot of uncertainty surrounding tariffs and their potential impact, making it difficult to predict specific forecasts of increased costs for individual items such as tomatoes. However, if this 20.91% import duties are maintained, he estimates that costs could rise between high single digits such as 7-8%, or perhaps among lower teenagers.
“We’re hoping to see these increases in autumn and winter,” he said. “At that time, production is low here in the US and we are leaning very heavily towards Mexico because of fresh tomatoes.”
According to the United States Consumer Federation, 15% of US food supplies are imported, including 32% of US food supplies and 55% of fresh fruit. According to the latest USDA data for 2022, around 69% of all fresh tomatoes available to US consumers are imported, and Mexico is the main source.
A group of more than 30 chambers of commerce and cross-border trade groups wrote to the U.S. Department of Commerce on July 11, urging the government to negotiate a new agreement rather than withdrawing it from the contract entirely. They warned that the end of the agreement would “have a broad impact on the US economy and affect the agriculture, warehouse, logistics, food and restaurant industries.”
“We are concerned that withdrawing from contracts at a time when the business community is already navigating significant trade uncertainties could lead to retaliatory actions by trading partners against other goods and crops that could pose even more difficulties for U.S. businesses and consumers,” the letter said.
Kathryn Palmer is a national trending news reporter for USA Today. You can contact her kapalmer@usatoday.com And with x @Kathrynplmr.
