There was a decline in tariffs on imported tomatoes after the commencing of NAFTA. Hence, Florida tomato producers feared that there will be a decline in demand for their products due to low-producers in Mexico.
As a result, they created a lobby with the government for setting a minimum price for imported tomatoes from Mexico; a minimum floor price was set, and yet US tomato producers could not protect their business, while the demand for exported tomatoes from Mexico increased three times.
A lot of American companies remained in favor of the agreement as their profits depended on and could increase with any gains that Mexico would make. For this reason, the Commerce Department stayed with the agreement, but this time they increased the minimum price by ten cents. Thus, the “Great Tomato War” between America and Mexico is actually merely a conflict between potato farmers from some provinces of Mexico, with the dominant ones being Nayarit and Sinaloa, and Florida.
These cater to the US winter market’s tomato requirements. Tomato growers from Florida have for many decades claimed that Mexican growers treat US markets as the dumping ground for their tomatoes. Also, the North American Free Trade Agreement (NAFTA), an organization that reduces tariff rates, exaggerated the claims made by growers in Florida that accused Mexican growers of dumping
As a consequence, Florida started an investigation into dumping. But, the American and Mexican governments, in 1996, agreed on a Suspension Agreement, with the purpose being to stop the investigation into dumping and to arrive at a minimum price for Mexican tomatoes imported into America. In the year 2012, as a result of intense lobbying from growers from Florida, the American government took a decision to put a stop to the Suspension Agreement that had been at work for sixteen years. As an answer, Mexico issued a threat to put 1.9 billion dollars as tariffs as a way of retaliation.