Trade War—According to the findings of USDOC investigations in 1996, dumping margins ranged from 4.16 to 188.45 percent. Nevertheless, Mexico has persistently denied the dumping of tomatoes into the United States Markets.
Along these lines, agricultural exports that are highly perishable should be either exempted from the antidumping laws or new models must be developed that take into account normal business practices instead of the cost of production. One significant flaw in the antidumping investigations was that only present exchange rates were used for determining fair or normal prices instead of covering the impact of fluctuations in the exchange rate.
Furthermore, the foreign producers must raise their prices with the increase in the value of the dollar. This leads to situations differing from dumping for the reason that products are imported to the United States above the local prices. The researchers further contended that the rise in the antidumping petitions works as protectionist tools.
Trade War
As indicated by the theoretical model, the minimum price determined by the Suspension Agreement does help growers from Florida. And if the rents are extensive enough, it may also help growers from Mexico. Provided that Mexican growers do benefit, then the rent quota goes from consumers to Mexican growers of tomato.
Conversely, American consumers are on the wrong side of this, along with plants for tomato processing, as they buy fresh tomatoes to be used as inputs. The increased minimum price due to the 2013 agreement will probably increase the effects related to welfare. Also, including various types with unique prices will probably add to the consequences of trade and welfare distortions.
No doubt, Florida is greatly compromised by tomato imports from Mexico, but these very imports also add to the welfare of the American consumer with the help of decreased prices.
As with any trade, policies followed will need compromises with some groups being in the wrong and others benefitting. Because of the lobbying by growers, politicians many a time do not take into account the wider spectrum consequences of their decisions.
