Tomato War – On December 1st, prior to the final USITC report, the Mexican government and the USDOC agreed to a minimum price of $5.17 per 25-pound carton for imported Mexican Tomatoes.

In response to this agreement, the United States decided to suspend the investigation related to the antidumping of tomatoes. Initially, this deal encompassed the variety of Tomatoes from Mexico regardless of the season. Nevertheless, two separate price floors were instituted in 1998, according to which the price of winter tomatoes could not decrease beyond $5.27/25 lb carton, whereas the price of summer tomatoes could not decrease beyond $4.30/25 lb.

Tomato War

It is important to note here that the initial price did not take into account the freight and insurance cost, the difference between Florida’s price and cost, or the transportation expenses. Hence, the agreement was canceled in 2002 since the majority of the Mexican tomato shippers refused to quit the agreement. As a result, the anti-dumping investigation started again.

Following these, several agreements were formed that focused on increasing prices and restoring the antidumping investigations. Mexico offered to escalate the base cost by 18-25 percent for each percent, contingent upon the kind of tomato and compelled all cultivators to comply with the new cost.

Previously, just 85 percent of the producers needed to consent to the arrangement. An exchange war between the USA and Mexico appeared to be likely. However, another assertion was made in March 2013, which raised the base cost by about ten percent for every pound for winter field tomatoes and established new value essentials for forte tomatoes and tomatoes developed in greenhouses.

On the other hand, Mexico remained firm to ensure the enforcement of the agreement. As a consequence, Mexico labeled all its domestically produced Tomatoes as “Not for Export to the USA” to prevent the smuggling of tomatoes into the United States and selling them at prices below the baseline cost.