Ag Today March 28, 2018

If China Strikes Back On Tariffs, California Tree Nut Exports Could Take A Hit

Julia Mitric
Tuesday, March 27, 2018 | Sacramento, CA |Capital Public Radio

California agriculture could find itself caught in the middle of the U.S. — China trade dispute.

After President Trump ordered a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum last week, China hit back, announcing it may impose a 15 percent tariff on agricultural exports from the U.S.

The U.S. faces competitors for every agricultural product it exports. California wines, for example, compete with wines from New Zealand and Chile. If China hits the U.S. with a 15 percent tariff on wine, that’s a problem, explains Dan Sumner, Director of the University of California Agricultural Issues Center.

“We may think California wine is special, but not everybody does,” Sumner said. “And if it’s 15 percent more expensive than it used to be because of the tariff, there’ll be a substantial reduction in how much gets sold in China.”

On Friday, China’s Ministry of Commerce announced a proposal to levy counter tariffs that would impact roughly $2 billion in U.S. food and agricultural exports to China. According to a USDA Foreign Agricultural Service briefing report, tree nut products and wine are on the target list as well as fresh and dried fruit.

Many California farmers and wine producers see China as a growing market, notes Sumner. And although California’s wine producers sell a smaller proportion of their total product to China than pistachio or almond growers do, they’re frustrated by the prospect of a competitive disadvantage.

The back and forth trade disputes happening between the U.S. and China make trade less predictable, Sumner argues. He said that could lead to trade disruptions that impact California food and wine producers, even before potential Chinese tariffs go into effect.

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