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US, Mexico reach deal to end tomato tariffs

Mexico supplies half the fresh tomatoes consumed in the United States and estimates tariffs would cost its exporters more than $350 million a year (AFP Photo/ALFREDO ESTRELLA)

Mexico City (AFP) - The United States and Mexico said Wednesday they have reached a deal to end US tariffs on Mexican tomatoes, imposed amid a surge in trade tension between the neighbors.

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

"After intensive discussions with all parties, we initialed 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 meanwhile 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 United States, had estimated the tariffs would cost its exporters more than $350 million a year.

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

The leftist leader said he "welcomes this deal."

Mexico exported around $2 billion of tomatoes to the United States last year -- its third-largest agricultural export to its northern neighbor, 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 percent of its exports to the United States, has nevertheless supplanted China as the biggest US trading partner this year, amid the ongoing trade war between Washington and Beijing.