Price of tomatoes set to rise as U.S. pulls out of agreement with Mexico

RIO GRANDE VALLEY, Texas (ValleyCentral) — The price of salsa, ketchup and a la mexicana dishes could soon be going up.

The price for most tomatoes imported from Mexico is set to rise more than 20% starting Monday.

On Friday, Congressman Vicente Gonzalez, State Representative Ryan Guillen and a representative from the produce industry held a press conference in McAllen to try and convince the Trump administration to pause the price increase.

The potential price hike on tomatoes is a separate issue from the on-again, off-again tariffs the President has been advocating for during his second term.

The question surrounding tomatoes is centered on the Tomato Suspension Agreement.

The agreement was signed in 1996 between the Department of Commerce and a majority of Mexican tomato producers and exporters.

During the past 30 years, there have been amendments to the agreement and occasionally one side or the other has pulled out.

But issues have been quickly resolved the partnership has been reformed. The latest version of the TSA has been in place since 2019.

The original purpose of the agreement was to prevent Mexican tomatoes from being dumped onto the market, thereby dropping the price for American growers.

The arrangement included built-in price controls so that, "signatory producers and exporters sell Mexican tomatoes at or above the TSA reference price to eliminate the injurious effects of exports of fresh tomatoes to the United States."

In April, the Trump administration announced it was going to "withdraw from the 2019 Agreement Suspending the Antidumping Investigation on Fresh Tomatoes from Mexico, with termination effective in 90 days."

They argued the agreement hadn't worked, and that now U.S. producers would be able to compete fairly in the marketplace.

In that same press release, the Commerce Department announced it would introduce an "anti-dumping" import tax to begin July 14, "resulting in duties of 20.91% on most imports of tomatoes from Mexico."

At Friday's press conference, Dante Galeazzi, CEO and President of the Texas International Produce Association, told reporters the TSA had created a level playing field for everyone in the tomato industry.

Galeazzi cited a report from Texas A&M University that he said showed the agreement had produced more than $8 billion in economic activity.

Representative Gonzalez and the other speakers asked the Commerce Department for a 90-day pause in withdrawing from the TSA.

They said that would give the department enough time to make any changes or amendments to the agreement if they're interested in improving it.

Gonzalez said he'd like to see an economic impact study conducted to see how withdrawing from the agreement might affect the area.

Galeazzi said the industry employs nearly 50 thousand workers in tomato production alone. That number doesn't include shipping, logistics and even government inspectors who make sure the produce is safe for consumers in the U.S.

"They use our bridges, they use our warehouses, they hire our people. They use our transport that goes around the country, and at the same time, we're able to provide tomatoes at a lower price for the American people," Gonzalez said.

The Congressman said withdrawing from the agreement now would have an "immediate inflation impact." He added that he didn't want tomato prices to rise like the price of eggs has gone up over the past few years.

Gonzalez said he'd like the administration to make a "thoughtful decision" concerning the agreement. He said it can be improved, but it would be a mistake to dissolve it.

Speaking on behalf of the produce industry, Galeazzi said withdrawing from the TSA would hurt Americans at large, and South Texans in particular.

“Texas is the heart of this. Last year, we crossed more than 2.1 billion pounds in Texas. 1.3 in Pharr. Roma, which is basically a new port for crossing tomatoes, crossed 200 million pounds, third behind Laredo. We are the community that will be most impacted if this agreement goes away," Galeazzi said.

Representative Gonzalez told ValleyCentral that imported tomatoes make up about 70% of all tomato consumption in the country. He warned that price hikes would not just apply to tomatoes.

He explained that tomatoes are routinely imported with other produce items like lettuce and watermelons.

"It's more efficient if you can bring them all together. It's more efficient if you can warehouse them together. But if you start messing with one product, it has an impact on others," Gonzalez said.

All the speakers at Friday's press conference asked community members to contact their local elected officials and the Commerce Department, urging them to push for the 90-day pause.