MXN: Now it's time for tomatoes - Commerzbank

On Monday night, the US government announced its intention to withdraw from a trade agreement with Mexico and impose a 17% tariff on Mexican tomatoes, Commerzbank's FX analyst Michael Pfister notes.

Threat of tariffs has not been averted

"The Mexican government criticised this as a politically motivated move, while Mexican farmers emphasised that tomato prices in the US are likely to rise as a result. Tomatoes are certainly not the most important commodity."

"However, this move makes it clear once again that, despite all the praise from Washington for negotiations with Mexico being much more pleasant than with Canada, the threat of tariffs has not been averted."

"Differences in relations still exist. The good relationship between the Mexican president and Trump may ensure that Mexico ends up with lower tariffs than Canada. Nevertheless, this alone is insufficient to completely avert the threat of tariffs."