Brace yourself for sticker shock in the produce aisle. A seismic shift in trade policy is about to hit a grocery staple—fresh tomatoes—hard, and American shoppers will likely foot the bill.
According to the Daily Mail, as of July 14, 2025, a decades-old trade pact with Mexico, known as the Tomato Suspension Agreement, will expire, slapping a 17 percent tariff on imported fresh tomatoes and threatening to drive up prices at stores like Walmart and Kroger.
Let’s rewind to 1996. That’s when the Tomato Suspension Agreement was first forged, a response to accusations that Mexican producers were “dumping” surplus tomatoes at unfairly low prices. The deal set price floors and included random inspections to balance protection for American farmers with affordable grocery costs.
For 29 years, this pact has kept tomato prices stable. It was renegotiated several times, including in 2019, but now the Commerce Department has announced it will let the agreement lapse. This decision marks a sharp turn from decades of policy.
Mexico supplies about 90 percent of U.S. tomato imports. Nearly three-quarters of all fresh tomatoes sold in America come from abroad. That dependency means any supply shock could ripple through the market fast.
Take NatureSweet, the largest tomato distributor in the U.S., selling at major retailers like Walmart, Kroger, Whole Foods, and Albertsons. Their signature Cherub grape tomatoes, packaged in distinctive bulbous containers with bright yellow stickers, are a familiar sight, grown almost entirely in Mexico.
The looming 17 percent tariff is a game-changer. NatureSweet’s CEO, Rodolfo Spielmann, isn’t mincing words about the impact. "There's no scenario where I can absorb those tariffs," he said. He doubled down on the financial strain. "The margins are not high enough," Spielmann added. Retailers and distributors are now squeezed between rising costs and consumer expectations.
Grocery stores face a tough spot. A can of spaghetti sauce or a simple mixed salad could see significant price jumps as these tariffs kick in. Shoppers, already battered by years of food inflation, may bear the brunt.
American tomato farmers, the intended beneficiaries of this policy shift, have long struggled. The U.S. hasn’t produced enough tomatoes for domestic consumption in decades, and jobs in the industry have steadily declined.
Robert Guenther, executive vice president of the Florida Tomato Exchange, is blunt about the pact’s failure. "It hasn't worked," he said. Domestic market share for U.S. tomatoes has consistently shrunk, he noted.
Yet, not everyone sees the agreement’s end as a loss. State Senators Rick Scott and Ashley Moody argue it levels the playing field. "The termination of the suspension agreement will allow US tomato growers to compete fairly in the marketplace," they wrote in an open letter.
This tariff isn’t just about tomatoes—it’s a microcosm of a larger trade debate. How do you boost domestic production without punishing consumers with higher prices? It’s a Republican policy dilemma with no easy answer.
For now, the risk of grocery inflation looms large. A supply shock in tomatoes could push food prices even higher, compounding years of cost increases. As free-market advocates, we must question whether government intervention here creates more problems than it solves.
So, what can you do? Stay frugal—consider alternatives like canned or frozen tomatoes if fresh prices spike. Keep an eye on grocery trends, and don’t shy away from asking retailers tough questions about where costs are coming from.