(CNN) — Strawberries offer a taste of summer, even when they are eaten in the dead of winter. But the year-round treat Americans have grown accustomed to could soon get more expensive.
The Trump administration is investigating whether Mexican growers are selling winter-harvested strawberries in the United States at unfairly low prices, a determination that could lead to tariffs on those imports and, ultimately, higher costs for shoppers.
If that happens, it would mark a break from decades of largely duty-free trade for Mexican strawberries under US free trade agreements. It could also add to affordability concerns heading into the pivotal midterm elections, as consumers already feel the squeeze from higher gas prices.
At first glance, these kinds of investigations may seem counterproductive for American consumers. If a foreign country can sell goods more cheaply, shouldn’t consumers be allowed to benefit from those lower prices? Generally, yes. But US law draws a line when foreign goods are sold at unfairly low prices and those imports cause significant harm to American businesses.
A whopping 98% of US strawberry imports came from Mexico last year, with shipments worth more than $1 billion, according to data from the US Department of Agriculture. The US becomes particularly reliant on Mexican strawberries during the winter months, when domestic production slows. But it’s unclear the extent to which pricing is causing the US to look more to Mexico, too.
The case was brought by Strawberry Growers for Fair Trade, a coalition of Florida strawberry producers, whose berries are typically harvested during the winter months.
Mexican imports have grown faster than demand for winter strawberries, taking market share from US growers by selling at lower prices, said Daniel Pickard, the lead counsel for the coalition. If the case succeeds, he expects the tariffs to have a “relatively modest” impact on consumer prices while helping US farmers compete.
There’s a recent example of how complicated that can be in practice. Tomato prices were 12.8% higher last month than a year earlier, according to the Consumer Price Index. That comes after the US imposed a roughly 17% antidumping duty on most Mexican tomatoes last July.
But it would be a mistake to attribute that increase entirely to the tariffs: Adverse weather conditions in tomato-growing regions of Mexico and freezing temperatures in parts of Florida during the first two months of this year also played a role, an April report from the US Department of Commerce found.
The Commerce Department is expected to release its preliminary finding in the strawberry case, which could call for higher tariffs, by August 18. It will likely be several months before a final determination is made.
Even after Commerce issues its preliminary finding, the tariff rate could still change. That happened last year in the case of certain Italian pasta imports, when Commerce initially proposed additional antidumping duties as high as 92% before ultimately lowering the rates to below 10% after reviewing additional information from the pasta makers.
The lower rates helped avert the prospect of dramatically higher prices — or potentially reduced access to some Italian pasta brands — for US consumers.
The-CNN-Wire
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