Potential USMCA tariffs could raise prices on imported produce, group warns

American trade officials are considering new tariffs on fruits and vegetables imported from Mexico and Canada as part of a renegotiation of the United States-Mexico-Canada Agreement. The International Fresh Produce Association warned that such tariffs would raise grocery prices and act as a tax on healthy eating. The group said the move would directly contradict administration efforts to encourage healthier diets. It urged officials to take tariffs on fresh produce off the table. "Tariffs on fresh produce would act as a tax on healthy eating, raising grocery bills and creating new barriers to accessing fresh, nutritious food," the association said in a statement. Under existing trade agreements, seasonal fruits and vegetables move between the United States and Mexico duty-free. The group said potential new tariffs, and the price hikes they would bring, have not been ruled out in the current USMCA talks.

The association pointed to the recent removal of duty-free treatment for Mexican tomatoes as a cautionary example. It said tomato prices skyrocketed 40 percent year over year after the change. That increase put upward pressure on the cost of everything from salads and sandwiches to salsa, ketchup and pasta sauces. The group said sufficient domestic supply does not exist to replace imported produce at the scale needed to meet year-round consumer demand.

It noted that American farmers play a vital role but weather conditions and limited water make it impossible to grow enough. "No tariff, quota, or restriction on market access can increase U.S. production," the association said. It used avocados as an example, stating that Americans have already consumed 3.3 billion pounds this year, with 89 percent of that supply coming from imports. U.S. growers account for about 11 percent of year-round demand. The fresh produce sector has long functioned as an integrated, duty-free North American market, with U.S. apples and potatoes going to Mexico and other produce coming north. The association said new tariffs and quotas threaten to upend this balance, leading to higher prices and reduced supply. It also warned that tariffs risk American jobs, as the $20 billion U.S. fresh produce network supports thousands of workers in transportation, warehousing, distribution, retail and food service.

Imposing tariffs would also likely trigger retaliatory trade penalties from Mexico and Canada, America's two largest agricultural export markets. The two countries account for one-third of all U.S. agricultural exports, worth more than $60 billion. The association noted that after the U.S. imposed tariffs on Mexican tomatoes, Mexican officials launched an investigation into the U.S. pork industry. "Tariffs are not a zero-sum game," the group said. The association argued that making America healthy starts with persuading Americans to make smarter food choices. It said imposing tariffs on fresh fruits and vegetables will raise grocery prices and undermine progress on getting people to adopt healthy eating habits.

With files from The Des Moines Register