( Graphic by The Packer staff )

Fresh produce exporters found themselves in the crossfire of the Trump administration’s trade priorities in 2018. This big narrative in 2018 will carry over to 2019 as tariffs remain a key concern for exporters of fruit and nuts to China, Mexico and India. India’s retaliatory tariffs were threatened in June but implementation of those tariffs was delayed several times and is now set to begin at the end of January.

While the Trump administration did pledge to help farmers deal with the retaliatory fallout from Trump’s decisions to apply tariffs on imports of steel and aluminum, the programs resulting from that pledge failed to universally impress industry leaders.

On the plus side, the Trump administration did complete negotiations for an updated North American Free Trade Agreement in 2018, an accomplishment widely embraced by produce leaders in the U.S., Mexico and Canada. Still, Mexico did not lift its retaliatory tariffs on U.S. apple imports, even with the completion of the trade deal.

Oct. 8
New NAFTA negotiations completed
By Tom Karst

The North American Free Trade Agreement has a different name but otherwise doesn’t change much for fresh produce marketers. Bringing Canada into an agreement already embraced by Mexico and the U.S. in late August, negotiators on Sept. 30 agreed on “NAFTA 2.0” with a new trade deal called the United States-Mexico-Canada Agreement (USMCA), refreshing the original agreement in place since 1994.

“In terms of tariff treatment, (the agreement) is generally open for fresh produce, and that’s good,” said Richard Owen, vice president of global business development at the Newark, Del.-based Produce Marketing Association. The major friction point for the negotiations were dairy and auto issues, Owen said. Once those issues were resolved, the talks were concluded rapidly, he said.

Trump can sign the deal after 60 days — November 30 — but Congress may take until next year to vote it up or down.

The House Ways and Means Committee and the Senate Finance Committee will likely have hearings on the trade agreement but cannot make any changes to the text, Owen said.

The agreement provides certainty to produce companies doing business in North America, Owen said, with a six-year review and a 16-year duration of the agreement.

“United Fresh looks forward to working with Congress to achieve the swift approval of this new agreement,” Tom Stenzel, president and CEO of the United Fresh Produce Association, said in a statement.

The leadership of the Canadian Produce Marketing Association also expressed satisfaction with the deal, stating that the agreement will ensure that the supply chains of the fresh produce industry remain integrated.

Western Growers said the U.S.-Mexico-Canada Agreement will enable food and agriculture to trade more fairly and could help expand exports of American agricultural products.

The agreement did not contain any language that would provide an anti-dumping tool to help protect seasonal producers of perishable crops, which had been an early goal of the talks for the Trump administration. However, Owen said that Trump administration officials have indicated they will seek a comprehensive evaluation of the produce industry in Mexico by the U.S. International Trade Commission and would use the findings of the investigation to guide further actions.

Sept. 24
Exporters worry about delays after new Trump tariffs hit China
By Tom Karst

Trade sources worry that U.S. exporters of fruit and other commodities may face inspection delays and other non-tariff barriers after the latest round of tariffs imposed on China by the Trump administration.

Counting retaliatory tariffs this year, China’s tariffs on fresh fruit and nuts now mostly range from 50% to 60% of the import value.

In what was termed by U.S. trade officials as the “continuing response to China’s theft of American intellectual property and forced transfer of American technology,” the Office of the United States Trade Representative released a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs.

The additional tariffs will be effective Sept. 24, and initially will be in the amount of 10%. In January, tariffs increase to 25%.

The latest U.S. tariff list targeting Chinese imports includes fresh mushrooms, garlic and a wide variety of fresh and processed fruits and vegetables.

Sept. 17
Trade promotion program begins
By Tom Karst

Seeking to help U.S. exporters of fruit, nuts and other commodities hurt by retaliatory tariffs find new export markets, a new program is months away distributing millions for the effort.

Taking applications through Nov. 2, the U.S. Department of Agriculture said it will award funds from the Agricultural Trade Promotion Program by early next year.

The cost-share program, funded at $200 million, is targeted to help commodity groups expand export sales in new and existing markets to blunt the harm by retaliatory tariffs imposed by China, Mexico, the European Union and other countries. The USDA Foreign Agricultural Service said it expects to issue about 70 awards under the 2019 program, with the awards generally granted for a three-year project period.

Sept. 3
China trade war hits grapes, cherries
By Tom Karst

U.S. mandarin, walnut, grape, cherry and peach exports will be the hardest hit by Chinese retaliatory tariffs, a new study from Rabobank reveals.

However, the same study reports that total demand for most U.S. fruit and nuts will increase over the next year.

Increasing Chinese demand will partially offset the effects of the tariffs. Fueled mostly by China and India, the Asian Pacific middle class will expand from 2 billion people in 2020 to 3.5 billion by 2030, according to Rabobank fruit analysts David Magana and Roland Fumasi, who wrote the study.

Despite the Chinese tariffs — currently between 50% to 60% for most U.S. fresh fruit and nuts — the authors said the potential change in total demand for U.S. fruits and tree nuts (domestic and export) is still positive for most commodities. That is especially true for almonds, walnuts, mandarins and lemons, the authors said.

The study also accounted for increased tariffs by India on U.S. apples, almonds and walnuts.

The report estimated the range of potential changes in demand for U.S. fruits and nuts for the year ending July 2019, and found that only peaches, pears and raisins are expected to face lower demand.

Sept. 3
USDA to buy millions in fruits and nuts for relief
By Tom Karst

The U.S. Department of Agriculture  will make special purchases of about $625 million in fruits and nuts to help U.S. growers hurt by retaliatory tariffs.

The Food Purchase and Distribution Program is one of three USDA designed to help growers hurt by this year’s trade battles, spending about $1.2 billion to purchase commodities, and it is most immediately relevant to specialty crop growers.

Gregory Iback, USDA undersecretary for marketing and regulatory programs, said in a press call Aug. 27 that the USDA will spread out purchases over four phases and would try not to displace school food purchases that would normally occur.

The staggered purchases seek to accommodate changes due to growing conditions, product availability, market conditions and even the status of trade negotiations, he said.

July 30
Trump’s tariff relief underwhelms produce
By Tom Karst

With no direct payments expected for specialty crop growers, the Trump administration announced its plan to give farmers hurt by retaliatory trade tariffs up to $12 billion in government relief.

Fruit growers have been slammed by tariffs from Mexico, China, India and other markets in response to the administration’s tariffs on steel and aluminum imports from multiple countries.

Joel Nelsen, president of Exeter-based California Citrus Mutual, said the relief plan falls short of what the industry was hoping for.

Secretary of Agriculture Sonny Perdue said in a news release that President Trump asked him to craft a short-term relief strategy to protect agricultural producers while the administration works on “free, fair, and reciprocal” trade deals.

“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” Perdue said in the release.   Nelsen said July 25 that the sudden release of the details of the plan took many industry leaders off guard.

June 11
Mexico adds 20% tariff to U.S. apples
By Tom Karst

Mexico has delivered on its promised tariffs on U.S. fresh apples, frozen potatoes and dried cranberries in response to President Trump’s steel and aluminum tariffs.

Mexican President Enrique Peña Nieto released a decree in response to the U.S. tariffs on steel and aluminum. Effective June 5, Mexico hit U.S. apples, frozen potatoes, processed cranberries and many other U.S. manufactured goods with a 20% tariff, according to the document published in Mexico’s official gazette.

Blueberries and grapes, which were previously mentioned by Mexico as potential targets, were not listed in the June 5 document.

Trump imposed tariffs, effective June 1, of 25% on steel and 10% on aluminum from Mexico, Canada, and the European Union. According to a news release from the government of Mexico, the decree suspends the preferential tariff treatment between the U.S. and Mexico and allows Mexico to put in place duties on a variety of products, including pork, some types of cheese, apples, cranberries, whiskey, steel and motor boats.

Canada’s list of retaliatory tariffs, set to go into effect July 1, includes U.S. fresh cucumbers but no other produce
The European Union on June 6 published a list of U.S. imports subject to retaliatory tariffs, starting in July. Besides U.S. steel products, the list includes orange juice and cranberry juice concentrate and dried cranberries among many other items totaling trade value of $3.4 billion per year.

June 4
India threatens U.S. apples with tariff
By Tom Karst

India has notified the World Trade Organization that it intends to slap a retaliatory tariff on U.S. apples and other goods in response to America’s tariffs on steel and aluminum from India.

The proposed 30% tariff — which would be added to the existing apple tariff of 50% — was not in place as of May 25, said Todd Fryhover, president of the Washington Apple Commission, Yakima. He said it remains unclear when the tariff would be applied, though India has indicated to the WTO that the retaliatory tariff would be applied before June 21.

India also is targeting almonds, walnuts, coffee, chickpeas, peas, coffee and cocoa, according to a report in The Journal of Commerce.

June 4
U.S. fruit exporters hit with more tariffs
By Tom Karst

U.S. fruit exporters are facing more stormy weather.

With U.S. exporters already dealing with recent tariffs imposed by China and India, Mexico said it would retaliate with new tariffs on U.S. apples, grapes and blueberries after President Trump imposed tariffs, effective June 1, of 25% on steel and 10% on aluminum from Mexico, Canada and the European Union.

Canada also published a list of retaliatory tariffs, including cucumbers, but largely sparing fresh produce.

May 7
China inspection delays worry U.S. exporters
By Tom Karst

Adding insult to the injury of higher tariffs, U.S. exports of fruits and nuts to China were being delayed in customs up to a week upon arrival in late April and early May.

The delay in processing U.S. fruit and nut imports was tied in some reports to inspections for violations of maximum pesticide residue levels.

Reports from China indicate that quarantine officials several months ago changed from inspecting 30% of loads to 100% of imports, said Richard Owen, vice president of global membership and engagement at the Produce Marketing Association. That has resulted in some rejected loads, he said. Seasonally heavier imports of produce may be contributing to delays at China’s ports, Owen said.

March 23
China threatens tariffs on U.S. fresh fruit, nuts
By Tom Karst

China has identified dozens of U.S. fresh fruit and nut exports among its top targets for trade retaliation for the Trump administration’s tariffs on Chinese steel and aluminum imports on March 23. The action was announced on a Chinese government website, which said that its first priority list of targeted products includes a 15% tariff on fresh fruit, dried fruit, nut products, wine, modified ethanol, American ginseng and seamless steel pipes. All together, the value of those exports to China is $977 million.