Effective April 2, China is implementing a 15 percent tariff on a range of US produce items. This is in response to the United States seeking to impose a 25 percent tariff on steel and aluminum products, mainly from China. The list of 128 products includes numerous fresh produce goods and produce exporters are assessing how this will impact business moving forward.
While metals are the focus for US tariffs, the Chinese list will particularly hurt the US agricultural industry. Of the 128 items targeted for a 15% tariff, around 80 of these include different fresh and dried fruits as well as nuts. Fruit farmers from across the country will be impacted. If export cuts result, excess supply will enter either the domestic market or have to find a home elsewhere. This would undoubtedly lead to a drop in prices for those commodities.
According to CNBC, U.S. exports of fruits, frozen juices, and nuts to China amounted to $669 million last year, and it was the top supplier of apples, cherries, walnuts, and almonds.
Impact on Citrus
Citrus too, looks set to be heavily impacted. “Citrus is on the list and it does create some consternation,” said Joel Nelsen, president of the California Citrus Mutual. “This thing could ratchet up and be just a negotiating step taken by both administrations. China has been a growing market for the $3.3 billion California citrus industry and now ranks as the third-largest export market behind Canada and South Korea. Orange and lemon exports are among the most significant of these products.”
Another product in the spotlight is almonds. California’s almond industry is worth around $5 billion. Although it enjoys strong domestic demand, almond growers are heavily invested in the export market to ensure good returns, with two-thirds of almonds produced in California going to the export market. China is a significant buyer of California almonds, importing 100,000 tons during the 2016/2017, according to the USDA.