Picture: REUTERS/Gary Cameron
Picture: REUTERS/Gary Cameron

 Mexico City — The US and Mexico said Wednesday they had reached a deal to end US tariffs on Mexican tomatoes, imposed amid a surge in trade tension between the neighbours.

The US imposed the 17.5% tariffs in May, after the countries failed to renew an agreement that suspended a US antidumping investigation first opened 23 years ago.

“After intensive discussions with all parties, we signed a new draft suspension agreement with the Mexican growers late last night (Tuesday). This draft agreement meets the needs of both sides and avoids the need for antidumping duties,” US secretary of commerce Wilbur Ross said in a statement.

The Mexican economy ministry expressed its “satisfaction” over the deal, which it said included the full reimbursement of tariffs paid by Mexican tomato growers.

The US commerce department said the draft deal would now be put to a 30-day review period, and signed on September 19 if both sides still agree.

Mexico, which supplies half the fresh tomatoes consumed in the US, had estimated the tariffs would cost its exporters more than $350m  a year.

President Andres Manuel Lopez Obrador had warned that could fuel migration to the US  by hurting an industry responsible for 1.4-million jobs in Mexico.

The leftist leader said he “welcomed this deal”. Mexico exported about $2bn of tomatoes to the US in 2018 — its third-largest agricultural export to its northern neighbour, after beer and avocados.

President Donald Trump’s repeated threats to impose tariffs on Mexican goods and close the border have created tension between the two countries.

Mexico, which sends nearly 80% of its exports to the US, has nevertheless supplanted China as the biggest US trading partner in 2019, amid the ongoing trade war between Washington and Beijing.