Consumers could see a sharp rise in the cost of tomatoes if the U.S. Department of Commerce pulls out of a trade agreement it has maintained with Mexico since the 1990s. Experts say that price hike could have a ripple effect on other foods – even (gulp) pizza.
Tomato prices could rise up to 80 percent if the U.S. moves ahead with plans to end the “tomato suspension agreement,” according to a study by economists at Arizona State University. The 1996 trade arrangement established a price floor for imported Mexican tomatoes.
Ending the agreement would allow the U.S. to reinstate tariffs on Mexican tomatoes. Experts say that would increase their price and the price of other foods, too.
"Other products are going to be affected by it because they are compliments to tomatoes,” Luis Ribera, an Ag economist at Texas A&M University, says.
“Look at pizza,” he says. “You've got tomatoes, pizza sauce, cheese and wheat products. So there’s going to be some ripple effect on other products.”
Some U.S. growers support ending the trade agreement. They’ve accused Mexico of dumping low-cost tomatoes in the U.S. to drive down prices.
But Ribera worries the move could lead to retaliation from Mexico and hurt the Texas economy.
“Texas is the No. 1 point of entry of Mexican produce to the U.S.” he says. “All the produce that we get from Mexico supports about 8,000 jobs in the U.S. and it has about an economic impact of $850 million.”
The U.S. Department of Commerce says it plans to end the tomato trade agreement with Mexico on May 7.
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