CHOICES
A publication of AAEA
The United States is the world’s largest agricultural exporter and has enjoyed substantial agricultural trade surpluses for decades, reaching a record of about $40 billion in 2011. However, this landscape shifted dramatically over the last decade, with the United States recording its first deficit (–$1.3 billion) since USDA records began in 1967. The deficit then climbed to $37 billion in 2024, and in just the first half of 2025 reached $28.6 billion, putting it on track to hit $55–$60 billion for the year (USDA-FAS, 2025). This unprecedented shift is partially driven by rising imports of vegetables, which have grown rapidly from $2.1 billion in 2000 to $13.3 billion in 2024 (Figure 1).
Amid this widening US agricultural trade deficit and growing fresh vegetable imports, recent trade measures have introduced renewed uncertainty into North American agricultural markets. Mexico, the United States’ largest agricultural trading partner and principal supplier of fresh vegetables (Naing, Devadoss, and He, 2025), plays a central role in this context. Table 1 summarizes key US trade policy developments during 2025 that affected fresh vegetable imports from Mexico and Canada. The year began with the February issuance of Executive Order 14194, which authorized a 25% tariff on most Mexican and Canadian imports (Executive Office of the President, 2025a). In early March, the administration amended the order to exempt United States–Mexico–Canada Agreement (USMCA)-compliant products, temporarily easing tensions for a large share of agricultural and perishable goods (US Customs and Border Protection, 2025).
At the same time, the long-standing tomato trade dispute between the United States and Mexico reemerged in mid-2025. The US Department of Commerce announced in April its intent to withdraw from the 2019 Tomato Suspension Agreement (TSA) and formally terminated the agreement in July, reinstating a 17.09% antidumping duty on fresh tomato imports from Mexico (US Department of Commerce, 2025a,b). This action renewed the dispute in the decades-long pattern of US–Mexico negotiations over tomato trade fairness and market access, reflecting the broader uncertainty now surrounding US fresh vegetable trade.
In light of rising concerns among US vegetable producers about import competition, growing political pressure for stricter trade enforcement, and the approaching 2026 USMCA review (Office of United States Trade Representative, 2025c), policy debates have intensified over how to balance consumer affordability, domestic farm viability, and regional market integration. In this context, we review the patterns of US fresh vegetable imports, assess the effects of a hypothetical 25% tariff on US fresh vegetable trade, and discuss the broader implications of trade policies on prices and employment along the US fresh vegetable supply chain.
Figure 2 illustrates the distribution of US fresh vegetable imports by source country in 2024. Mexico accounted for 69% of US fresh vegetable imports in 2024, followed by Canada at 20%, while all other countries contributed marginally. This dominance underscores both the depth of North American supply-chain integration and the limited diversification of US import sources. Such concentration increases vulnerability to supply disruptions and trade policy shocks—such as the recent withdrawal from the TSA and the imposition of tariffs on Mexican tomatoes. Canada’s secondary but stable role reflects its proximity and integration under the USMCA, while smaller suppliers such as Peru, Guatemala, and China occupy niche positions in specific product categories.
Figure 3 further illustrates how Mexico’s share has expanded from roughly 65% in 2000 to nearly 69% in 2024, reinforcing its position as the overwhelmingly dominant supplier to the US market. Canada’s share has remained relatively stable at about 20%, while imports from emerging Latin American suppliers have grown modestly but still represent small fractions of total imports. The declining share of the “rest of the world” category underscores the continued geographic concentration of US fresh vegetable imports within North America, particularly under the USMC A framework.
Several factors have driven the United States’ growing dependence on fresh vegetable imports from Mexico. Geographic proximity, favorable climate, and complementary agroecological conditions give Mexico a strong logistical advantage, enabling the reliable and cost-effective supply of perishable products such as vegetables (Huang, Guan, and Hammami, 2022). In addition, trade liberalization under the USMCA has expanded market access for Mexican produce, while continued government support—through infrastructure investment, agricultural policy, and producer financing—has further enhanced Mexico’s export capacity (Khanal, Poudel, and Gopinath, 2024).
Mexican vegetable imports have also increasingly shifted from complementing to competing with US production. Once primarily serving to fill seasonal gaps, these imports now frequently overlap with domestic harvest periods, particularly in labor-intensive crops such as asparagus and bell peppers. Khanal, Poudel, and Gopinath (2024) document sharp increases in imports during both the January–June and July–December harvest windows, directly coinciding with peak production in major producing states such as Florida, Georgia, and California. This growing temporal overlap has intensified competition in US markets, placing downward pressure on domestic prices and farm revenues.
These competitive pressures have emerged alongside a broader decline in US vegetable production and a rising share of imports in total supply. In 2024, imports accounted for 36.3% of the US vegetable supply, up from 9.7% in 1990 (USDA-ERS, 2025). The magnitude of this shift varies by crop: Tomatoes, cucumbers, squash, and berries have faced the most pronounced import competition. For instance, in 1990, US tomato production was three times higher than imports, whereas by 2024, imports had doubled domestic output (Figure 4). Similarly, cucumber imports increased from roughly half of domestic production in 1990 to seven times that level in 2024.
Growing concerns that the expansion of US fresh vegetable imports threatens the long-term viability of domestic production have heightened policy attention tothe structure and resilience of the fresh produce sector. These concerns are particularly salient for specialty crop growers and rural communities, where import competition has eroded market shares and margins. Although fresh vegetables traded under the USMCA framework are currently exempt from the proposed 25% US tariffs on Mexican imports (US Customs and Border Protection, 2025), the upcoming 2026 USMCA review introduces uncertainty about the future scope of tariff provisions, and recent shifts in US trade policy underscore how exemptions can change rapidly in response to political and economic pressures.
To quantify these potential impacts of tariffs, we estimate a structural gravity model that relates historical variation in tariff rates to trade flows across commodities, using monthly US import data at the 10-digit Harmonized System (HS) level from 2000 to 2023 obtained from theUSDA Global Agricultural Trade System (USDA-FAS, 2025), combined with tariff data at the 6-digit HS level from UNCTAD (UN Trade and Development, 2025).
Table 2 reports the import quantities and values for the top 15 fresh vegetables imported from Mexico in 2023, along with their simulated percentage changes under a 25% tariff scenario. Column 3 indicates that in 2023, peppers, tomatoes, and cucumbers were the top three imports by value, ranging from $800 million to $1.5 billion, with peppers alone exceeding $1.53 billion. Several tomato varieties—particularly plum and cherry tomatoes—also rank among the top categories, underscoring the central role of tomatoes in the US–Mexico vegetable trade. Other major imports include asparagus, onions, lettuce, and squash, each valued between $360 million and $446 million.
Simulation results in columns 4 and 5 indicate that a 25% tariff would lead to substantial but uneven declines across commodities. Import quantities are projected to fall by 15%–36%, while import values decline by 20%–41%. More tariff-sensitive products—such as carrots, garlic, mushrooms, and asparagus—show sharper quantity reductions exceeding 20% and value declines above 40%, reflecting higher price elasticity or limited alternative suppliers. In contrast, large-volume commodities like peppers, tomatoes, and cucumbers exhibit smaller proportional declines, suggesting more inelastic import demand.
On average, import quantities across all commodities are projected to decline by 17.6%, and import values by 21.3%—both smaller than the imposed 25% tariff. This gap suggests partial tariff absorption by Mexican exporters, indicating incomplete pass-through to US prices. Based on a 2023 import value of $12.3 billion, the estimated tariff revenue would total approximately $3.1 billion. However, it should be noted that actual revenue could be lower due to incomplete pass-through and potential adjustments in demand and sourcing.
Overall, these findings highlight both the scale of US dependence on Mexican fresh vegetables and the uneven vulnerability of different commodities to trade policy changes. While major imports may absorb tariffs with limited quantity adjustments, specialty and low-volume crops face a higher risk of supply disruptions and price volatility under protectionist measures.
While Table 2 shows that a hypothetical 25% tariff on Mexican fresh vegetable imports would reduce trade volumes, its effects would extend well beyond border transactions. Reduced import flows could generate ripple effects throughout the fresh vegetable supply chain—from farms to retailers—through both direct and indirect channels (Johnson, 2020).
On the farm side, lower import volumes may raise farm-gate prices and temporarily increase revenues for some US growers. However, sustained production expansion would depend on broader structural constraints, including labor availability, climatic conditions, and production costs. As noted by Ridley and Devadoss (2021), US fresh produce growers already face tight labor markets and rising input expenses, limiting their ability to respond quickly to higher prices.
At the retail level, the degree to which tariffs translate into higher consumer prices would hinge on market competition, product substitutability, and retailers’ pricing strategies (He, 2025). Crops such as tomatoes, peppers, and cucumbers—where Mexico dominates off-season supply—are especially vulnerable to retail price increases during winter months when domestic production is limited.
Previous studies suggest that trade shocks can also affect employment across both farm and nonfarm sectors (He, 2020; Charlton et al., 2025). Employment impacts are likely to emerge along the distribution chain, particularly in border states such as Arizona and Texas—major hubs for cross-border produce logistics. Reduced import volumes could lower throughput in trucking, inspection, and cold-storage operations. Although the magnitude of these effects remains uncertain, a sustained decline in trade would likely have measurable implications for regional employment and overall supply chain resilience.
The US fresh vegetable sector faces increasing challenges that heighten its exposure to both import competition and trade policy uncertainty (Johnson, 2020). Rising import volumes—particularly from Mexico—have contributed to persistent price pressures and narrower margins for domestic producers. These pressures are compounded by ongoing labor shortages and rising input costs, which limit growers’ ability to expand production or compete on scale (Ridley and Devadoss, 2021). The establishment of the Seasonal and Perishable Agricultural Products Advisory Committee by the US Trade Representative and USDA in 2023 reflects growing recognition of these structural concerns and the need to reassess the competitiveness of US producers within an increasingly integrated North American market.
Recent trade policy developments and the upcoming USMCA review in July 2026 add further uncertainty to an already complex trade environment. While such measures may provide limited relief to US growers through higher farm-gate prices, they also risk broader ripple effects—raising costs for consumers, altering supply chain relationships, and potentially inviting retaliatory responses from trade partners.
These dynamics highlight the importance of understanding how trade policies shape outcomes across the entire supply chain. Tariffs and import adjustments can redistribute benefits and costs among farmers, distributors, retailers, and consumers in ways that are not always visible in aggregate trade data. Further research linking trade flows to employment, pricing behavior, and supply-chain organization would help clarify these mechanisms and inform future policy design.
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