NOGALES, Ariz. - A trade war could be brewing between the United States and Mexico.
U.S. tomato growers say Mexican growers are using unfair tactics to undercut their market. Now the Trump Administration has thrown out a deal that set tomato prices and avoided tariffs---a move that could have a real impact in Southern Arizona.
Tomatoes at Chamberlain Distributing warehouse are just a sample of the roughly $580 million worth that cross the border at Nogales bound for grocery stores in the U.S. and Canada.
But some U.S. tomato growers say Mexican producers are not playing fair, cutting competition by undercutting prices. In trade talk, that's "dumping."
As far back as 22 years ago they convinced the U.S. government to investigate the dumping claim but the probe went on hold when Mexico agreed to minimum wholesale prices and other conditions.
Now U.S. growers have convinced our government to throw out that agreement. Unless there's a new agreement by early May the dumping investigation is back on and tariffs---penalty charges-- kick in.
Jaime Chamberlain says, “Then you'll probably see a reduction in the importation of Mexican tomatoes into the United States, and you will be limited in what you can buy; what varieties are available on the domestic market. And I think it'll be a lot more expensive for consumers to have tomatoes in their products.”
Chamberlain says Mexican tomato growers have lived up to the agreement, and he worries tariffs will kill the business that a University of Arizona study says supports 33,000 jobs across the US---many of them in southern Arizona.
Arizona’s Congressional delegation sent a letter to Commerce Secretary Wilbur Ross urging him to continuing working towards a new agreement that would keep Mexican tomatoes flowing. The Border Trade Alliance has also stepped up to oppose ending the old agreement.
But U.S. growers say the Mexican tomato industry has found unfair ways to get around the old agreement. Michael Schadler, Executive Vice President of the Florida Tomato Exchange says consumers should not be hurt if there's a new deal, or no deal.
“Mexico has a near 60% market share in the United States so that it's not a realistic proposition that Mexican tomatoes are going to be cut out of the market consumers are going to continue have a wide variety of choice and prices will will will change very little if any."
A long list of Senators and Members of Congress have also appealed to the Commerce Secretary to do more for the interests of U.S. tomato growers.
But Jaime Chamberlain predicts tariffs will drive down demand and depress a major piece of the local economy.