Tomato growers, potential nightmare

Mexican tomato growers could have their worst nightmare in history in the coming days.

If an agreement is not reached between Mexico and the United States, starting July 14, the United States will impose a 20.91% tariff on Mexican tomatoes.

The tax will reduce Mexico's red tomato exports to the United States by 25%, the destination to which it sends 99% of its foreign sales.

This would increase the price of Mexican tomatoes in the United States in the same proportion.

In addition, it would lead to the destruction of 100,000 jobs in Mexico.

The US tariff would directly impact consumers in that country.

And at the same time, it would cause severe economic and employment damage in Mexico.

With six days until the deadline to reach an agreement, there are no good signs of success, admits the president of the National Agricultural Council, Jorge Esteve.

Despite the fact that Mexican tomato growers' organizations, supported by the Secretaries of Economy, Marcelo Ebrard, and the Secretary of Agriculture, Julio Berdegué, have presented various offers and conditions, they have not received a response from their counterparts.

Tomato growers in the United States, with Donald Trump as president, feel strong because of their political muscle.

Mexico's expectation is that the neighboring country's governing team will be aware of the negative impact that rising tomato prices and rising inflation will have on American consumers.

Esteve, however, says he remains optimistic that a last-minute agreement will be reached.

Mexico has not yet fully recovered from the problem in the livestock industry caused by the screwworm and is already on the verge of entering another serious problem with the potential application of a 21% tariff on Mexican tomatoes by the United States.

The damage that the US tariff would cause is estimated by Juan Carlos Anaya, director of the Agricultural Markets Consulting Group (GCMA).

The specialized consulting firm identifies three possible scenarios in the event of the cancellation of the Suspension Agreement with the U.S.:

1.- The effective imposition of the 20.91% tariff starting July 14, 2025, without corrective measures.

This scenario could reduce export volume by up to 25%, cause a sharp drop in farm prices, and jeopardize more than 100,000 direct and indirect jobs in the country.

2.- Partial negotiation that allows maintaining some preferential conditions, such as specific quotas or temporary bilateral agreements.

This scheme would partially mitigate the economic impact, although it would increase logistical and operational costs.

3.- Renewal of the agreement before its expiration, which guarantees continuity in trade and certainty for producers and buyers.

This scenario would allow Mexican tomatoes to remain competitive in the United States, their main destination.

The most consistent approach would be to continue the Suspension Agreement.

It is essential to preserve the stability and competitiveness of the Mexican fruit and vegetable sector and, at the same time, is necessary to keep prices low in the United States.

The possible imposition of a 20.91% tariff would not only distort bilateral trade rules.

It would also contravene the principles of openness and cooperation established in the United States-Mexico-Canada Agreement (USMCA) and within the framework of the World Trade Organization (WTO).

These types of temporary protectionist measures weaken legal certainty for producers, exporters, and consumers in both countries.

Although Mexican tomato growers' organizations are the ones directly reaching agreements and conciliating with their counterparts and authorities in the United States, the Mexican Economy and Agriculture ministers face a major challenge in supporting and assisting Mexican producers. As the days go by, the window for reaching an agreement narrows.

We'll see if, in Trump's new protectionist era, efficient Mexican tomato producers can make it through.

The benefit or harm will not only be for this important productive sector, but also for the Mexican economy and even for the American economy and consumers.

We'll see.