Tomato Tariffs Pit Florida Against Arizona
America first? It really depends on what part of America you live in.
You say tomato, I say here's an important lesson in how America First trade policies don't work for all Americans.
The Trump administration's decision this week to terminate a 22-year-old tomato trade agreement between the U.S. and Mexico—the Tomato Suspension Agreement—means that the juicy red fruits coming across the southern border will now be subject to a 17.5 percent tariff. That import tax, in turn, will likely lead to price increases and, potentially, tomato shortages. More than half of all tomatoes consumed by Americans come from Mexico, and the new tariffs could result in a price increase of as much as 85 percent, according to an analysis from Arizona State University.
It's easy to think about this latest skirmish in the trade war as being American farmers against Mexican farmers. "The Department of Commerce remains committed to ensuring that American domestic industries are protected from unfair trading practices," is how Commerce Secretary Wilbur Ross, in a statement, explained the rationale behind the new tariffs.
Indeed, tomato growers and some members of Congress have been lobbying the Trump administration for months, asking for the termination of the Tomato Suspension Agreement. They argue that Mexican tomatoes are flooding the market and making it impossible for American farmers to compete—American tomato production is down 34 percent since 2002, while Mexican tomato imports are up 125 percent in the same period, according to a letter sent in February to Ross by Sen. Marco Rubio (R–Fla.) and other members of Congress.
But this week's victory for Florida-based tomato growers comes at the expense of not only Mexican farmers and American consumers; it also deals a serious blow to tomato-importing jobs in Arizona.
Those are, of course, American jobs.
In Nogales, Arizona, for example, the largest single commodity brought over the border from Mexico is tomatoes. More than 1.5 billion pounds enter the United States each year, entering a supply chain that supports 30,000 American jobs, according to a University of Arizona analysis published last year. The new tariffs put those jobs in jeopardy.
"This will force Arizona tomato distributing companies to pay hundreds of millions of dollars just to be able to stay in business," Lance Jungmeyer, president of the Fresh Produce Association of the Americas, a trade group representing importers, said in March, when the Trump administration first signaled its intention to withdraw from the trade agreement. "Without a Suspension Agreement, produce warehouses in Southern Arizona will face extreme hardship and potential closure."
Lawmakers from Arizona sent Ross a letter in March asking him to reject the lobbying efforts from Florida and other states.
"Without the Tomato Suspension Agreement, Arizona's economy, jobs and tomato prices are at risk," Sen. Martha McSally (R–Ariz.) wrote in an op-ed this week.
Trump has apparently sided with Florida.
When trade policy is dictated from Washington, those types of choices are unavoidable. Trump's decision to put tariffs on steel and aluminum imports, for example, benefited the businesses that produce those metals—which immediately raised their prices—while disadvantaging any business that uses steel or aluminum to make its products. There are far more employers and employees in the latter category than the former.
The spat over imported tomatoes is a good reminder that trade isn't really conducted between countries at all, but between businesses and individuals seeking to find mutually beneficial arrangements. It's overly simplistic to think about Mexican tomatoes and Floridian tomatoes as if they are on opposite sides. More tomatoes being grown and imported into American means more jobs—and more delicious tomatoes.