U.S. exporters react to the tariffs imposed on April 2. ( File photo )

As anticipated tariffs on U.S. fruit and nuts shipped to China became reality on April 2, financial markets reacted, as did fresh produce industry groups representing the affected export crops.

Apples, pears, oranges, cherries, grapesstrawberries, peaches, lemons, mandarins, plums, almonds, cashews, pistachios and walnuts are among the items on the list, first floated by China as possible targets on March 23. The 15% tariffs on those exports, in response to the Trump administration’s import tariffs on steel and aluminum from China and some other countries, are on top of tariffs already in place. A total of 128 products made the list.

The value of the fruit/nut exports to China is $977 million. According to media reports, China’s Customs Tariff Commission is increasing tariff rate on pork products and aluminum scrap by 25% as well, for almost $3 billion total exports to China.

China’s increased duties are a concern, said Steve Reinholt, export sales director at Wenatchee, Wash.-based Oneonta Trading Corp. However, Reinholt said the increase in the tariff for apples, from 10% to 25%, may not create a huge difference in the market in the short term because the marketing season to China is slowing and Washington’s fruit size profile doesn’t exactly match China’s preferences.

“We are pretty concerned about cherries and that’s the next thing we have to face the first of June,” he said. While Chinese consumers love cherries and many will pay the additional price, any drag in demand will hurt growers, he said.

“If the volume was to slow down 15% to 20% (because of the tariffs), that fruit has to go to another market,” he said.

The increased tariffs will make U.S. fruit — already on the high price side compared to global competition — even more expensive to China’s consumers, said Nick Kukulan, CEO of Oakland, Calif.-based Paramount Export Co, “It doesn’t help and it will widen our gap,” he said, noting cheaper fruit from global competitors South Africa, South America and Egypt.

Dennis Nuxoll, vice president of federal government affairs in Washington, D.C., for Western Growers, said the group wished that the two countries would have resolved differences before imposing new tariffs.

“We hope that this is a prelude to negotiations so we can get back to less threats and more negotiations to figure out a resolution,” Nuxoll said.

The retaliatory tariffs are counter-productive to export growth, said Robert Guenther, senior vice president of public policy for United Fresh Produce Association, in a statement.

“We look forward to working with the U.S. negotiators and trade representatives to focus energies on additional export markets for fresh produce including new and emerging markets,” Guenther said in the statement.

The Produce Marketing Association had its annual Fresh Connections China event in Shenzhen, China, on March 21. Richard Owen, vice president of global membership and engagement at PMA, said the event featured discussions of promising export opportunities for U.S. cherries and other high-value produce through e-commerce channels.

It is uncertain what the ramifications could be for a 15% tariff on U.S. cherries, but Owen said Canada may pick up market share in China if the U.S. is saddled with the tariff.

Owen expressed hope the countries reach an agreement that won’t hurt the fresh produce industry.

The additional 15% tariff on U.S. citrus will have an effect on California citrus growers and, and it hinders the industry’s ability to be competitive, said Joel Nelsen, president of California Citrus Mutual, Exeter.

“Maintaining access to foreign markets and having the ability to compete in a global marketplace are critical to the success of the citrus industry,” Nelsen said in a statement.

Nelsen said the Chinese government at first indicated that talks could “alleviate the real issues,” but the tariffs came before that could happen.

“Now Chinese consumers and California citrus producers are innocent parties to a trade debate,” he said in the statement.

Nelsen is traveling to Washington, D.C., this week with CCM Executive Vice President Casey Creamer and Board Chairman Curt Holmes to meet with legislators and administration representatives on trade and other issues affecting California citrus, according to the statement.

The Agriculture Transportation Coalition said in a statement that new tariffs will make U.S. products more expensive and cause Chinese buyers to look to other suppliers.

“To say that this will disrupt the U.S. agriculture and forest products export shipping supply chain is a gross understatement,” the group said. “And the threat of more retaliation by China looms large, as additional U.S. measures against China exports to the U.S. (to combat China’s intellectual property violations) are still to be announced.”

Fruit and nut exporters have voiced concerns over a trade war’s effects on their ability to export to China, which has increasingly become a popular market for U.S. agricultural products.

China is the third largest market for U.S. cherries, and the season begins May.

The U.S. apple industry earned full access to China in 2015, and ships about 2.5 million cartons there.

 

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