NCS
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If tomato prices jump due to new tariffs on the Mexican-grown produce, restaurant proprietor Teresa Razo says her companies could go bust.
“I give it three months, and then we go bankrupt,” stated Teresa Razo, proprietor of two Argentine-Italian eating places in Southern California.
An almost three-decade-old US-Mexico commerce settlement gave method on Monday to 17% tariffs on most Mexican tomato imports.
The tariff could imply larger prices for Americans on the grocery retailer, on the pizza parlor — anyplace that makes use of tomatoes. And for some small companies, larger prices could shut them down fully.
The tomato tariffs are among the many newest examples of President Donald Trump’s chaotic tariff coverage, which has shaken up world commerce, left firms unsure methods to plan for the long run, and made Americans nervous about the place the world’s largest financial system could be headed.
Field-grown tomatoes value US consumers about $1.70 per pound as of May 2025, in line with the Bureau of Labor Statistics. Consumer tomato prices could rise by about 10% and demand could fall by 5% as a results of these tariffs, in line with Timothy Richards, a professor of agribusiness at Arizona State University.
The United States is the highest marketplace for Mexican tomato exports, in line with the US Department of Agriculture. In a June report, the division discovered that the brand new tariffs would probably result in a drop in tomato imports and better prices.
Some US growers say it’s about time for the tariffs, which are supposed to battle “dumping,” or the observe of promoting low cost exports right into a overseas market to undercut homegrown merchandise.
The Tomato Suspension Agreement has been in place since 1996, primarily setting a flooring for tomato imports. The Commerce Department announced in April it was withdrawing from the settlement as a result of the “current agreement has failed to protect U.S. tomato growers from unfairly priced Mexican imports,” in line with an announcement. That, in flip, would end in 20.9% duties on most Mexican tomato imports, the Commerce Department stated on the time.
“For more than three decades, five consecutive agreements have failed to stop the illegal dumping of unfairly priced tomatoes into the U.S. market from Mexican producers,” Robert Guenther, government vice chairman of the Florida Tomato Exchange, informed NCS in an announcement. Guenther added that he believes the commerce settlement has harmed American farmers.
It’s an accusation disputed by Walberto Solorio, a Mexican tomato grower and president of the Baja California Agricultural Council, which represents greater than 120 tomato growers.
Solorio informed a NCS producer that small violations by some Mexican producers haven’t been sufficient to warrant the collapse of your complete settlement.
“I see it as more of a political issue than a commercial one, not logic or numbers,” Solario stated. “Everything indicates, within reason, that the agreement should prevail and that the agreement has been fulfilled.”
‘Instability’ and ‘fear’
Consumers and companies could really feel the pinch.
“Somebody that would dine out three times a week, maybe now they’ll do it once or twice because we have to increase our prices,” stated Razo, who wants tomatoes for salads and for marinara sauce in pizzas and pastas at her eating places, Villa Roma in Laguna Hills and Cambalache Grill in Fountain Valley.
But some firms will keep away from the tariffs as a result of they use US-produced tomatoes. Heinz makes use of solely domestically grown tomatoes for its ketchup merchandise bought within the United States. DiGiornio additionally states on its web site that its frozen pizza sauces are made with California-grown tomatoes.
And some small companies, like Apollonia’s Pizza in Los Angeles, may eat the price of utilizing Mexican tomatoes for its toppings as a substitute of passing it on, in line with co-owner Justin De Leon.
But not everybody can afford that.
Razo is making an attempt to supply tomatoes from home growers as a substitute, but when she will be able to’t discover US tomatoes quick sufficient, she may need to boost menu prices.
With usually last-minute adjustments to tariff implementation this yr, she’s stopped following the information every single day for her psychological well being. She stated she’ll take a wait-and-see method with the tariffs earlier than devising a technique and added that the tariffs have created “instability” and “fear.”
“We don’t need more of that,” Razo stated. “We already have enough.”
Guenther stated American tomato growers can produce sufficient tomatoes year-round, “thanks to technological advancements and geographic diversity across the United States. Terminating the agreement would still allow Mexican producers to sell tomatoes in America; they’d just have to comply with trade laws.”
But Solorio stated Mexican imports have been topic to thorough quarterly audits. “We have complied with the minimum reference prices, with the reports, with the border quality inspections,” he stated.
De Leon stated Apollonia’s Pizzeria makes use of Mexican tomatoes for its recent tomato toppings, whereas its sauce is made with California tomatoes.
He adjustments the place he buys his tomatoes from to get the very best in-season produce year-round, switching from California to Mexico tomatoes relying on the season.
Tariffs on key components like cheese are already costing him extra and might be simply one other headache in a traumatic enterprise.
“I just hope it comes to an end soon,” De Leon stated.