The All-Round Madness of Trump’s Tomato Tariffs

The Trump administration accuses Mexico of “dumping” tomatoes on the US — something the US would never dream of doing with the agricultural goods it sends to Mexico (sarc).

The Trump administration continues to escalate its economic war against its largest trade partner, Mexico. In recent weeks alone, Washington has imposed potentially fatal sanctions on two smallish Mexican banks and a brokerage house, which were quietly paused last week; it has implemented a 3.5% tax on the remittance payments US-based migrants, many of them Mexican, send home; and it has escalated its raids on migrants, many of them also Mexican.

Now, to cap things off, Washington just imposed a 17% tariff on US imports of tomatoes, almost all of which come from Mexico. As Bloomberg notes, the move comes just days after Trump unveiled plans to impose a 30% tariff, beginning Aug. 1, on many Mexican products that don’t fall under the USMCA agreement he negotiated in his first term.

The Trump administration accuses Mexican farmers of unfairly “dumping” (i.e. selling at an artificially low price) tomatoes on the US market — something the US would never dream of doing with the agricultural goods it exports to Mexico, if you’ll excuse my sarcasm.

“Mexico remains one of our greatest allies, but for far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes. That ends today,” Commerce Secretary Howard Lutnick said in a statement. “This rule change is in line with President Trump’s trade policies and approach with Mexico.”

Mexico’s Sheinbaum government begged to differ, arguing that market share won by Mexican tomato farmers in past decades is a result of “the quality of the product, and not any unfair practice.” She also said the tariff would probably have limited impact on the exports of Mexican tomatoes to the US given the scale of US dependency. She’s probably got a point.

A Long Time Coming

For its part, the Florida Tomato Exchange (FTE), a lobby that represents the state’s growers, packers and shippers and enjoys close ties to the Trump administration, welcomed the move, stating that “the playing field will finally be levelled” for U.S. growers.

The FTE has waited a long time for this moment. The first time it accused Mexican farmers of “dumping” practices was back in 1996, just two years into NAFTA. In response, Mexican farmers agreed to set a floor price on tomatoes in a bid to ensure that US farmers were not being undercut. In return, the US suspended an investigation into the Mexican farmers’ alleged dumping practices.

Since then four rounds of agreements have taken place, the last one in 2019. But the times for normalised trade relations between the US and Mexico appear to be well and truly over.

As with so many of Trump 2.0’s trade policies, the tariffs on Mexican tomatoes are likely to backfire, with the price ultimately being paid by US consumers. Two out of every three tomatoes consumed in the US come from Mexico, according to official figures.

Since the signing of NAFTA in 1994 the market share of US tomatoes has slumped to 30% from 80%, according to the Florida Farm Bureau, while imports of Mexican tomatoes have increased four fold. The tomato trade between the two countries is now worth close to $3 billion.

Tons of Floridan tomatoes have already gone to waste as a result of Trump’s tariffs and migration crackdown, as WSVN Miami reported in mid-May:

With tariff talks top of mind, South Florida farmers say they’re in trouble. Crops are rotting on the vine and they’re blaming the ongoing trade wars and immigration changes. What does this mean for the future of our food? 7’s Heather Walker investigates.

Perfectly good tomatoes are being plowed over — instead of picked. It’s a sad scene happening in South Florida.

Heather Moehling, President, Miami-Dade County Farm Bureau: “You can’t even afford to pick them right now. Between the cost of the labor and the inputs that goes in, it’s more cost-effective for the farmers to just plow them right now.”

Although the tariffs on Mexico did not came into effect for goods compliant with the United States-Mexico-Canada Agreement, including tomatoes, the threat of tariffs alone was enough to disrupt the U.S. market:

“The Mexican industry exported, in some cases, double and triple the daily volumes to beat being subject to the 25 percent tariff in February and March and the 10 percent tariffs in April. That just devastated our markets in the U.S.,” [Tony DiMare, president of DiMare Homestead, which owns over 4,000 acres of tomato farms in Florida and California told WVSN].

Farmers say President Trump’s tariffs and the threat of tariffs have caused thousands of acres of tomatoes to go to waste because the price to pick and pack them costs more than what the tomatoes are selling for this year.

Changes in immigration are also taking a toll, with many pickers afraid to go to work.

Homestead farm worker: “Many workers have left, others are leaving now… A lot of people are really afraid and sometimes they come, sometimes they don’t come and the harvest is lost because it cannot be harvested, so that’s why so much produce is lost.”

The Trump administration is already aware of the strain its erratic policies are having on the nation’s farmers. In April, U.S. Agriculture Secretary Brooke Rollins announced that her agency is preparing a contingency bailout plan for farmers should the trade wars continue to escalate.

“We are working on that. We are preparing for it. We don’t believe it will be necessary,” Rollins said.

In other words, US citizens could end up paying doubly for Trump’s tariffs, first through higher prices at the checkout and secondly through bailouts to US farmers. Meanwhile, on the Mexican side of the border concerns have been raised that if Trump’s tariffs are effective in bringing down US imports of Mexican tomatoes (a big “IF” for reasons already outlined), one possible beneficiary will be the drug cartels, which Trump claims to be waging total war against.

BBC Mundo (machine translation):

“Mexican tomatoes are going to become cheaper, but the question is how companies are going to deal with this problem. They are going to have to reduce their workforce, they are going to have to rethink how many hectares they are going to plant,” said Faustino Delgado, a leader of the agricultural workers union.

Most of the industry, moreover, is in Sinaloa. The so-called “Sinaloa red pearl” is produced there. Agro-export land coexists alongside land belonging to of one of the most important drug trafficking cartels in the world.

Over the past year, a war between factions of the Sinaloa cartel has put the state on tenterhooks and a curfew is currently in place in the capital, Culiacan. The roads where the tomatoes comes out, in addition, are on the front lines of the battle.

“A tariff like this exacerbates the problems driving Mexican workers to either want to migrate to the US in search of opportunities or to swell the ranks of organized crime,” Ortiz-Mena says.

The potential fallout of a tomato tariff extend far beyond the commercial realm.

Pot, Meet the Mother of All Kettles

Perhaps the maddest — and most maddening — aspect of the Trump administration’s imposition of sanctions on Mexican tomatoes is the stated justification, or pretext, for doing so: namely, that Mexico’s farmers are “dumping” tomatoes on the US market. In doing so, it seeks to paint US famers as victims of underhand market practices by their Mexican competitors.

However, when it comes to dumping (i.e. selling at an artificially low price) agricultural produce on the international markets, no one, with the possible exception of the EU, comes close to the US’ heavily subsidised farmers and Big Ag corporations. For decades the US has destroyed the livelihoods of millions of farmers around the world by unleashing on to the global markets surplus produce at below-cost price.

One of the biggest victims is Mexico. Over the years, the Institute for Agriculture and Trade Policy has published reports tracking the incremental harm US dumping of basic agricultural staples has done to Mexico’s ability to feed itself. From its 2023 report, Swimming Against the Tide: Mexico’s Quest for Food Sovereignty in the Face of U.S. Agricultural Dumping:

In 1994, NAFTA eliminated most of the trade restrictions Mexico had used to protect its farmers from foreign competition, and in 16 of the 28 years since, the U.S has dumped corn, soybeans, wheat, rice and cotton exports into Mexico at prices 5%-40% below what it cost to produce them. In turn, Mexican producers of these crops experienced prices drops of 50%-68% in the 12 years after NAFTA took effect. From 2014 to 2020, U.S. exports of priority food crops came into Mexico at unfairly low prices, undermining the incentives for Mexican farmers to increase production.

The US was able to do this by continuing to subsidize agricultural producers even after NAFTA while Mexico’s government pulled most of its subsidies. Mexico’s political class, in thrall to neoliberal ideas such as economic liberalisation, privatisation and “free” trade, showed scant interest in safeguarding, let alone developing, the country’s internal market. The government had already begun slashing subsidies to Mexican famers over a decade before NAFTA.

As a result, it became all but impossible for small and mid-sized producers to compete with producers from the US once NAFTA once signed. Inevitably, Mexico became increasingly dependent on the US for staple crops like corn, beans, wheat and rice. Once the birthplace of maize, Mexico now imports roughly half of the corn it consumes, almost all of it from the US.

At the same time, it has significantly increased its exports to the US of tomatoes, chiles, avocado, coffee, grapes, strawberries and water melon. But it’s the staple crops that matter most.

Salgado Uberto Salgado Nieto, a researcher at the Institute of Economic Research, points out that the the main consequence of NAFTA, almost certainly intended, “was the loss of food sovereignty, because the large producers [that were left standing] were not geared at producing basic grains for the Mexican diet such as corn and beans, but at producing avocados, berries and tropical fruits that are in high demand outside the country.”

The Food and Agriculture Organization (FAO) of the United Nations estimates that the threshold at which a country becomes what it calls “food-vulnerable” is when as much as 25% of its food supply comes from abroad. According to a study published by the National Autonomous University of Mexico, or UNAM, by 2011 Mexico was sourcing 50% of the food it consumes, especially basic grains, from abroad, mostly from the US. By 2021, the figure had reached 57%.

When the government of former President Andrés Manuel López Obrador sought to reverse this trend by prioritising local production of staples and banning US-grown GM corn for human consumption, the US resumed its dumping of corn. As Timothy A Wise and Stewart A.L. James reported in January, export prices were on average 14% below production costs between Aug 2023 and Dec 2024:

U.S. corn dumping had been at pause as U.S. export prices skyrocketed above production costs amid the COVID-19 pandemic, a trend protracted further by the Russia-Ukraine war’s impact on world grain markets. But dumping is now back, with a vengeance.

This resumption is not unique to corn, though we focus on it here as a particularly relevant case study. Our earlier report documented U.S. agricultural dumping in a number of other commodity markets including soy, wheat, cotton, and rice. It seems clear that the resumption of corn dumping is symptomatic of a broader trend across several crops. And USDA projections show that low prices will likely persist in coming years.

In other words, while the Trump administration accuses Mexico’s tomato growers of dumping their produce on the US, US growers are doing exactly the same thing with corn in Mexico, and could well be doing the same with other staple foods in the near future. Also, as readers may recall, when AMLO tried to ban GMO corn, mainly for health reasons, the US and Canadian governments called for the formation of a dispute settlement panel under the USMCA trade deal. Unsurprisingly, the panel ruled against Mexico.

Alienating the US on the Global Stage

In sum, not only are Trump’s tariffs on Mexican tomatoes likely to fuel higher prices for US consumers, they could also push agricultural workers in Sinaloa into the welcoming arms of the drug cartels or even towards the increasingly militarised US border. The way things are looking in Florida, some of them may even be allowed across, if only to pick a few days worth of tomatoes before being raided by ICE.

Meanwhile, the latest tariff threats exacerbate economic uncertainty while further alienating the US — and its partners — on the global stage.

As we noted last week, Trump’s threat to impose 50% tariffs against Brazil days after President Lula spoke openly about dedollarisation at the BRICS summit is likely to work in Lula’s favour and against the interests of Trump’s close ally in Brazil, Jair Bolsonaro. Lo and behold, the New York Times just reported that Trump’s Brazil tariff threats have rekindled support for Lula while the Bolsonarists who allegedly called for the tariffs are being widely denounced as traitors.

Admittedly, Mexico’s Sheinbaum government is far more constrained than Brazil in terms of how it can respond to Trump’s threats, for an assortment of reasons: Mexico’s geographic position, so close to the US, and its geopolitical reality, so far from the “Global South”; its near-total dependence on the US economy; the highly asymmetrical nature of its relationship with the US; and the constant, overhanging threat of US military intervention.

But even Sheinbaum may soon have to throw caution to the wind. Recent polls suggest that her cool, calm approach to Trump may be losing appeal among voters as Trump escalates his attacks.

This may explain why Mexico agreed to participate in the recent BRICS summit, for the first time ever, as well as why it is now seeking to forge closer ties with its USMCA partner, Canada, with a view to aligning their strategies for negotiating with Trump. As readers may recall, in the days immediately following Trump’s election in late November, senior Canadian politicians were calling for Mexico’s removal from USMCA. Now, they are looking for a rapprochement. Once again, Trump is excelling in his accidental role as the great global unifier.