Michigan farmers are reacting to a new 17 percent tariff on tomatoes from Mexico implemented by the White House earlier this week.
The move is the culmination of the United States leaving the 2019 Tomato Suspension Agreement, an international trade deal intended to stop the practice of Mexican tomatoes undercutting ones produced in America.
Greg Bird, executive director of the Michigan Vegetable Council, said Mexican tomato prices have undercut American tomato farmers, and Mexico has not respected international trade agreements over prices.
"We've declined in our acres over the last years because of the amount of tomatoes that came in from mainly Mexico, some from Canada, and the prices that they came in at were lower than what they should have been," Bird said.
The agreement, according to the International Trade Administration statement required Mexico “to sell at or above certain minimum selling prices and to eliminate at least 85 percent of the dumping found in the underlying investigation on each entry of tomatoes.”
Bird said that Mexico can afford to sell the tomatoes for lower costs in part because Mexico has less stringent minimum wages for farmers.
But the U.S. Chamber of Commerce said, in a statement the tariff could hurt U.S. businesses. They said leaving the agreement, amid economic uncertainty, “could lead to retaliatory actions by our trading partners.”
"Farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes,” said Secretary of Commerce Howard Lutnick, in a statement from the International Trade Administration.
Politicians and business leaders have expressed concern about rising prices as well.
Texas Gov. Greg Abbott signed a resolution in June calling for the restoration of the Tomato Suspension Agreement. The resolution reads the agreement is “vital,” to Texas’ economy and said 32,000 jobs and $4.5 billion could be lost.
Still, Bird noted that any increased tomato production would likely begin next year, as this year's crop is already on the vine.
In addition, Bird cautioned that other uncertainty in the prices of inputs like nitrogen, pesticide, fuel and potash, could cause problems in the future.
“Inputs like nutrients that you put in the ground early in the season were very expensive this year,” he said. “I think there'll be a lot of people maybe growing some more next year, maybe not.”
