Key Points

As per the European Commission, dumping is a trade practise of exporting goods at a lower price than the domestic market in order to increase one's market share internationally, while anti-dumping duties are additional taxes imposed on the imported goods by a country to maintain the prices in the national market.

In a statement on Monday (local time), the US Department of Commerce stated that the withdrawal of the almost three-decade-old agreement and imposition of the antidumping duty came after the US claimed that "Mexican tomatoes have been sold in the United States at unfair prices."

"Today, the U.S. Department of Commerce announced it is withdrawing from and terminating the 2019 Agreement Suspending the Antidumping Duty Investigation on Fresh Tomatoes from Mexico (the 2019 Agreement). Commerce is withdrawing under Section XI.B of the 2019 Agreement, which explicitly allows Commerce to take such an action with 90-days' written notice," the statement read.

"Now that the 2019 Agreement is terminated, Commerce is issuing an antidumping duty order, resulting in duties of 17.09 percent on most imports of tomatoes from Mexico. Antidumping duties are calculated to measure the percentage by which Mexican tomatoes have been sold in the United States at unfair prices," it added.

The move came days after the US announced a 30 per cent tariff on goods from Mexico starting August 1.

US Secretary of Commerce Howard Lutnick also confirmed that the withdrawal decision was taken in line with President Trump's "trade policies and approach with Mexico".

"Mexico remains one of our greatest allies, but for far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes. That ends today... This rule change is in line with President Trump's trade policies and approach with Mexico," Lutnick said as per the statement.

As per the US Department of Commerce, since 1996, the US domestic tomato industry has sought protection from what it claims are unfairly priced or dumped Mexican tomato imports.

Over the past 27 years, this has led to five suspension agreements--in 1996, 2002, 2008, 2013, and most recently in 2019.

The 2019 agreement aims to eliminate the harmful impact of Mexican tomato imports on the US market and under this agreement, Mexican exporters committed to sell tomatoes at or above minimum prices and to reduce dumping by at least 85 per cent on each shipment.

- ANI