Trump Imposes New Tariff on Mexican Tomatoes, Impacting Arizona

Categories: Arizona Business NewsArizona State News

Agricultural workers in Arizona harvesting tomatoes, facing new tariff challenges.

News Summary

On July 14, 2025, President Trump announced the termination of the 2019 Tomato Suspension Agreement, imposing a new 17% tariff on Mexican tomatoes. This decision has sparked concerns among Arizona agricultural producers, particularly NatureSweet, which sources a large portion of U.S. tomatoes from Mexico. Critics argue that this tariff could threaten up to 50,000 jobs and significantly raise retail tomato prices. Lawmakers express fears of retaliatory tariffs from Mexico and further economic challenges in border states.

Arizona – President Donald Trump officially announced on July 14, 2025, the termination of the 2019 Tomato Suspension Agreement, which had allowed Mexican tomatoes to enter the United States tariff-free. As a result, a new 17% tariff will be imposed on fresh tomato imports from Mexico, a decision that is expected to have wide-ranging economic implications, particularly for agriculture in border states like Arizona.

The U.S. Commerce Department made this decision following complaints by American tomato growers alleging unfair trade practices by Mexican suppliers. This agreement, which had been in place since 1996, set minimum pricing thresholds preventing the dumping of tomatoes into the U.S. market at below-market rates. With the termination of the agreement, concerns are rising among U.S. growers, especially in Arizona, where companies like NatureSweet are particularly affected.

Industry experts predict that the new tariff could significantly disrupt the agricultural sector and create economic challenges for border communities. Current estimates suggest the tariff may endanger approximately $8.33 billion in economic activities linked to agriculture, according to a study by Texas A&M University. Arizona Governor Katie Hobbs has criticized the decision as part of a “reckless trade war,” arguing that it could jeopardize more than 50,000 agribusiness jobs across Arizona and Texas.

Local business leaders are concerned about the potential consequences for their operations. For instance, NatureSweet, which sources nearly 70% of U.S. tomatoes from Mexico, has recently invested over $5 million in expanding its Bonita facility and is projected to hire 250 agricultural workers over the next three years. However, these growth plans may now be threatened by elevated costs and logistical complications due to the new tariff.

In addition to the tariff’s impact on businesses, retail tomato prices may increase by around 8.5% to 10%, as estimated by Professor Timothy Richards from Arizona State University. The increased prices could place a financial burden on consumers, particularly in border cities heavily reliant on the tomato trade, including Nogales, Arizona.

Critics, including Arizona lawmakers such as Senator Mark Kelly and Representative Ruben Gallego, have voiced strong opposition to the termination of the Tomato Suspension Agreement. Both lawmakers contend that the tariff amounts to a hidden tax burden on Arizona families and could lead to retaliatory tariff actions from Mexico against U.S. agriculture exports. These retaliatory measures could exacerbate existing tensions in trade relations between the two nations.

In contrast, supporters of the tariff, like the Florida Tomato Exchange, argue that the action is necessary to combat the illegal dumping of unfairly priced tomatoes in the U.S. market. They highlight that over 60% of U.S. tomato growers have gone out of business since the year 2000, with domestic market share plummeting from 80% to 30%.

Concerns over the tariff’s potential effects on the food supply chain are compounded by ongoing economic challenges, including rising costs and inflation. Local leaders, including Nogales Mayor Jorge Maldonado, emphasize that the tariff could lead to catastrophic impacts on revenue, employment, and trade for border communities.

In conclusion, the termination of the Tomato Suspension Agreement and the introduction of a new tariff on Mexican tomato imports is expected to have profound repercussions for U.S. agriculture, particularly in states like Arizona. As the situation evolves, the long-term effects on both businesses and consumers remain to be seen.