Preliminary indications are that the U.S. Department of Commerce is withdrawing from the Tomato Suspension Agreement on May 7.

Reuters quoted a Mexican government source with this information late on May 6, which was the eve of the deadline for a Commerce Department decision.

"As of tomorrow, a tariff of 17.5 percent will be applied on the value of the product ... Mexican exporters will be affected, it's going to affect their financial flows but that is going to be directly transferred to U.S. consumers," Mexican Deputy Economy Minister Luz Maria de la Mora was quoted as saying by Reuters.

Ms. De la Mora "added that the U.S. measures will remain in place until a new suspension agreement is reached."

Late on May 6, Lance Jungmeyer, president, Fresh Produce Association of the Americas, sent a memo to the association's distributor-members indicating, "The Mexican growers have continued to engage with the Department of Commerce, and we hold out hope that an agreement can be reached. However, we won't know for sure how to proceed until further word comes from Commerce Secretary Wilbur Ross, who has said his intent is to withdraw from the Tomato Suspension Agreement on May 7."

Jungmeyer advised his members to "continue to follow the Tomato Suspension Agreement until further notice. Nothing is official until it is official. Until or unless Commerce notifies the general public via the Federal Register, or by sending a formal letter of withdrawal to the Mexican growers, the Tomato Suspension Agreement remains in effect."

While The Produce News seeks independent confirmation, the Reuters report would indicate the formal withdrawal has been presented to Mexican growers.

"It can take 2-5 days for a notice to appear in the Federal Register, so we cannot assume that on the morning of May 7 that Commerce has officially withdrawn from the Tomato Suspension Agreement," Jungmeyer wrote May 6. "In essence, stay tuned and look for an official declaration from the U.S. government. In the meantime, continue to buy and sell tomatoes under the existing terms of the Tomato Suspension Agreement, which remains in effect until official notification from the U.S. government."

"It Commerce withdraws from the Tomato Suspension Agreement, how will you approach your business? Unfortunately, there are still some unanswered questions. There also are some things you can still do to position your company for success," Jungmeyer conveyed to distributors of Mexican tomatoes.

First, Jungmeyer advised that distributors stay in touch with their customhouse brokers.

"Now more than ever your custom house broker is going to prove his or her value," he said. "Your custom house broker will give you advice about surety bonds, how to calculate your Customs valuation and more. For tomatoes that are crossing the border today, May 6, you may find that you should ask your custom house broker to ask Customs to ensure that your crossing posts as of today. If the Tomato Suspension Agreement is nullified, any tomatoes that are presented that day or afterward will be subject to the duty. Once the tomatoes are entered for commerce, there will be 10 days to finalize entry paperwork."

Jungmeyer continued: "If you intend to import tomatoes and you don't have an Automated Customs Holding account (ACH), then you are behind the game. You can still apply, but you are likely to have disruptions in your business. Apply here: https://www.cbp.gov/sites/default/files/assets/documents/2018-Nov/CBP%20Form%20400.pdf.

"No matter what, you can count on the FPAA continuing to support your business, whether it's by hosting workshops on Customs procedures, or fighting in Washington, DC, so that your voice is heard." Jungmeyer summarized, "Together, we have come this far. Together, we will carry forward."