In a move likely to heat up produce prices and trade tensions, the US government announced on Monday it is imposing a 17% tariff on most fresh Mexican tomatoes after talks with Mexico collapsed without a new deal.

The decision marks the formal end of the 2019 Tomato Suspension Agreement, which had allowed tomatoes from Mexico to be imported tariff-free as long as exporters followed minimum pricing rules to avoid dumping allegations. The Commerce Department cited pressure from US growers as a key reason for the shift, saying it had been “flooded with comments” urging stronger protection.

“This tariff will help rebuild the shrinking US tomato industry,” said the Florida Tomato Exchange, noting that Mexico now supplies 70% of US tomato consumption — up from 30% just 20 years ago.

However, US businesses that grow tomatoes in Mexico or rely on imports warned that the new duty could drive up grocery bills and disrupt supply chains.

In a letter sent last week to Commerce Secretary Howard Lutnick, the Chamber of Commerce and 30 other business groups said US companies employ 50,000 workers and generate $8.3 billion in economic benefits moving tomatoes from Mexico into communities across the country.

“We are concerned that withdrawing from the agreement – at a time when the business community is already navigating significant trade uncertainty – could lead to retaliatory actions by our trading partners against other commodities and crops that could create further hardship for U.S. businesses and consumers,” the letter said.

Economists say the impact on consumers will be felt quickly. “Retail prices for tomatoes in the US will likely rise around 8.5% with a 17% duty,” predicted Tim Richards, agribusiness professor at Arizona State University.

The new tariff is separate from the broader 30% base tariff on products from Mexico and the European Union that President Donald Trump announced Saturday as part of his wider trade reset agenda.

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Inputs from Associated Press

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