Tomatoes balancing between US and Mexico flags, symbolizing trade agreements.

Tomato Trade Wars: How a US-Mexico Agreement Impacts Your Produce Prices

Kai Mendoza in Business & Economy August 2025 • 4 min read.

"Explore the hidden costs and surprising winners in the U.S.-Mexican tomato trade agreement, and how it affects what you pay at the grocery store."

For decades, the U.S. and Mexico have been embroiled in what some call the “Great Tomato War.” This isn't a war fought with weapons, but with trade policies and tariffs, specifically concerning the import of Mexican tomatoes into the United States. At the heart of this conflict is the Tomato Suspension Agreement, designed to prevent Mexican growers from ‘dumping’ tomatoes—selling them at prices below the cost of production—in the U.S. market.

The latest iteration of this agreement, implemented in 2013, sets a minimum price for Mexican tomatoes entering the U.S. While the intention is to protect American farmers, the reality is far more complex. This agreement impacts not only producers in both countries but also consumers, who ultimately pay the price for these trade maneuvers. Furthermore, Canada, though not a direct party to the agreement, feels the ripple effects due to its integrated agricultural market with the U.S.

So, how does this all work? This article will explore the intricacies of the U.S.-Mexican Tomato Suspension Agreement, breaking down its effects on prices, production, and ultimately, your grocery bill. We'll uncover who the winners and losers are in this ongoing trade saga, and what it means for the future of agricultural trade.

Decoding the Tomato Suspension Agreement: How Does It Work?

Tomatoes balancing between US and Mexico flags, symbolizing trade agreements.

The core of the dispute lies in the claim by U.S. tomato growers, primarily in Florida, that Mexican producers were undercutting them by selling tomatoes at unfairly low prices during the winter months. To address this, the U.S. Department of Commerce stepped in, leading to a series of ‘Suspension Agreements.’ These agreements essentially set a floor on how low the price of imported Mexican tomatoes could go.

Think of it like this: imagine a store setting a minimum price on a particular item, regardless of how cheaply it could be sold. The goal is to prevent a ‘price war’ that could drive local producers out of business. However, this also means consumers might pay more than they would in a truly free market.

Here's a breakdown of the key aspects:

Minimum Price: The agreement establishes a minimum price, which varies depending on the type of tomato (field-grown, greenhouse, or cherry/grape).
Enforcement: The U.S. government monitors imports to ensure compliance with the price floor.
Impact on Mexico: Mexican producers must adhere to the minimum price, potentially limiting their ability to compete on price in the U.S. market.
Impact on Canada: Though not directly involved, Canada's tomato market is affected as trade patterns shift in response to the agreement.

The economic effects are multifaceted. While U.S. producers may benefit from higher prices, consumers could end up paying more. Mexican producers face restrictions on their export potential, while Canadian growers navigate the shifting trade landscape.

The Bottom Line: What Does It All Mean?

The U.S.-Mexican Tomato Suspension Agreement is a complex issue with far-reaching consequences. While designed to protect domestic producers, it also introduces market distortions that affect consumers and international trade dynamics. Understanding these impacts is crucial for making informed decisions about food policy and trade relations.

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Everything You Need To Know

What is the 'Great Tomato War' and what are the primary tools used in this conflict?

The 'Great Tomato War' refers to a long-standing trade dispute between the U.S. and Mexico concerning tomato imports. It's not a physical war but rather a conflict involving trade policies and tariffs. The primary tool used is the Tomato Suspension Agreement, designed to prevent Mexican growers from selling tomatoes at prices below the cost of production in the U.S. market.

What is the Tomato Suspension Agreement and what problem is it trying to solve?

The Tomato Suspension Agreement is an agreement between the U.S. and Mexico that sets a minimum price for Mexican tomatoes imported into the U.S. The agreement aims to prevent Mexican growers from 'dumping' tomatoes, which means selling them at unfairly low prices (below the cost of production). This is intended to protect American tomato farmers, particularly in Florida, who claim they are undercut by lower-priced Mexican imports, especially during the winter months. Without this, US farmers may struggle to compete and potentially be driven out of business.

How does the Tomato Suspension Agreement impact tomato prices for consumers in the United States?

The Tomato Suspension Agreement can lead to higher tomato prices for consumers in the United States. By setting a minimum price for imported Mexican tomatoes, it eliminates the possibility of purchasing tomatoes at potentially lower prices that would exist in a completely free market. The agreement aims to protect U.S. producers, but this protection comes at the cost of potentially increased prices for consumers, affecting their grocery bills. These market distortions highlight the complexities of international trade agreements.

Besides the U.S. and Mexico, which other country is affected by the Tomato Suspension Agreement, and how?

Canada, though not a direct party to the U.S.-Mexican Tomato Suspension Agreement, is also affected. This is due to the integrated agricultural market between Canada and the United States. The trade patterns shift in response to the agreement, leading to ripple effects in the Canadian tomato market. These indirect impacts demonstrate how interconnected global trade can be, even when agreements are bilateral.

What are the potential long-term implications of the U.S.-Mexican Tomato Suspension Agreement on agricultural trade relations and food policy?

The U.S.-Mexican Tomato Suspension Agreement highlights the complexities and potential pitfalls of trade protectionism. While the agreement may offer short-term benefits to specific domestic producers, it can lead to market distortions, higher prices for consumers, and strained international trade relations. Over the long term, such agreements could incentivize retaliatory measures from other countries, disrupt global supply chains, and hinder innovation in agricultural production. Furthermore, these types of agreements raise questions about the role of government intervention in agricultural markets and the balance between protecting domestic industries and promoting free trade.