Business Strategies

Accords Ease Trade Tensions with Mexico, Japan

By Pan Demetrakakes, Senior Editor

Aug 29, 2019

Recent preliminary trade agreements with Mexico and Japan have the potential to keep tomato prices in America from soaring and to provide relief for U.S. farmers hurting from an ongoing trade war with China.

The deal with Mexico removed a threat of a crippling 23.5% tariff on Mexican tomatoes, on top of the 17.5% already being charged. The U.S. Commerce Department had determined the extra tariff was justified as an antidumping measure and had scheduled it to go into effect on Sept. 19.

However, Mexican tomato growers reached an agreement with Commerce minutes ahead of an Aug. 20 deadline. The agreement is now undergoing a 30-day comment period before taking effect.

Meanwhile, President Trump and Japanese Prime Minister Shinzo Abe announced on Aug. 25 that they had reached an agreement on tariffs during the Group of 7 summit talks in Biarritz, France. The preliminary deal will cut Japan’s tariffs on farm commodities including beef and pork in return for the U.S. holding off on additional tariffs on Japanese cars.

The deal offered the U.S. basically the same terms as the Trans-Pacific Partnership, a multinational trade agreement from which Trump withdrew the U.S. soon after taking office. Abe, for his part, faced criticism that Japan had not gotten enough in the deal, which featured no reduction in car tariffs nor any promise to avoid raising them in the future.