Washington | Reuters — The U.S. Commerce Department said on Tuesday it will begin imposing a 17.5 per cent tariff on imported Mexican tomatoes, but said it is optimistic that a deal can be reached to extend a 2013 agreement that suspended a U.S. anti-dumping investigation.

“The Department of Commerce remains committed to ensuring that American domestic industries are protected from unfair trading practices,” Secretary of Commerce Wilbur Ross said in a statement. “We remain optimistic that there will be a negotiated solution.”

The tariff will go into effect in about a week.

Mexican Deputy Economy Minister Luz Maria de la Mora said Monday that U.S. consumers will face financial impacts after they could not reach agreement.

“We’re very disappointed but the good news is that negotiations continue, looking for a solution. And we hope that in the coming weeks we can in fact reach an agreement,” de la Mora said.

Mexico exports around US$2 billion worth of tomatoes to the U.S. annually, according to de la Mora.

Mexican imports account for just over half of the U.S. tomato market, according to the Florida Tomato Exchange.

Ross said the U.S. will refund any tariff deposits if a new deal is reached or if the U.S. International Trade Commission determines there is no injury based on its own independent investigation.

Ross said in early February that the U.S. would resume an anti-dumping investigation into Mexican tomatoes, withdrawing from a so-called suspension agreement that halted the anti-dumping case as long as Mexican producers sold their tomatoes above a pre-determined price. U.S. growers and lawmakers say that deal has failed.

A trade war over tomatoes has been averted twice since the 1990s, most recently in the 2013 deal that put a price floor on Mexican tomatoes sold in the U.S. while barring U.S. growers from pursuing anti-dumping charges against Mexican exporters.

Fruit and vegetable growers in the southeastern U.S. had persuaded the Trump administration to seek the ability to impose seasonal anti-dumping duties against Mexican produce in negotiations to update the North American Free Trade Agreement. But the demand was withdrawn in the final talks over the U.S.-Mexico-Canada trade deal reached last October.

A month later, the Florida Tomato Exchange, which represents growers in the state, petitioned the Commerce Department to terminate the 2013 tomato pact. It argued that the agreement could not be enforced and contained too many loopholes through which Mexican growers could dump tomatoes in the U.S. market.

The U.S. is also by far the largest buyer of Canadian tomato exports, accounting for about 98 per cent of Canada’s international sales of the crop.

The total value of Canada’s U.S.-bound exports of fresh and chilled tomatoes reached C$385.9 million in 2018 — down from C$410.9 million in 2017, but up from each of the previous four years, according to Statistics Canada.

— David Shepardson is a Reuters reporter covering U.S. trade and transportation issues from Washington. Includes files from Glacier FarmMedia Network staff.