From Price Pass-Through to Consumer Welfare in the U.S. Fresh Tomato Market under the Tomato Suspension Agreement (TSA)

Bheom Seok Kim and Xi He

No 404320, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: We examine how the 2025 termination of the U.S.-Mexico Tomato Suspension Agreement changed the consumer incidence of U.S. fresh tomato trade policy. The policy replaced a reference price regime with a 17.09 percent antidumping duty on Mexican fresh tomatoes, creating an upstream cost shock whose retail effect depends on vertical price transmission. We link USDA Agricultural Marketing Service shipping-point and wholesale prices, Nielsen IQ Retail Scanner data, and Nielsen IQ Homescan Consumer Panel data to estimate supply-chainpass-through and simulate demand-based welfare effects. The results show substantial attenuation between the border and the retail shelf: empirically grounded scenarios imply retail price increases of 2.56 to 6.46 percent, substantially below the statutory duty rate. However, supply-chain absorption does not eliminate consumer burden. Because fresh tomato demand is inelastic in the shortrun, households absorb much of the remaining shock by paying higher prices rather than sharply reducing purchases. The welfare burden is also regressive, with low-income house-holds facing losses relative to income roughly seven times larger than those of high-income households. Our findingsshowthattheconsumercostofagriculturaltradepolicyisdeterminednotonlybythelegal magnitude ofthebordermeasure,butalsobysupply-chainabsorptionandhouseholddemandstructure.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 35
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404320

DOI: 10.22004/ag.econ.404320

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