How would a North American tariff war impact Washington apple exports?
Good Fruit Grower reached out to Michael Schadler, the president of the Washington Apple Commission, to see how the organization is navigating the on-again, off-again tariff talk.
Schadler just returned from visiting with Mexican retailers and importers. “The mood about tariffs was pretty calm,” he said, as the Trump administration enacted 25 percent tariffs on goods from Mexico and Canada on March 4 and then issued a one-month reprieve on March 6.
“Most were hopeful that any tit-for-tat trade war, if it happens, would be short-lived,” he said.
Mexico had not announced retaliatory tariffs before the most recent reprieve, and it’s unclear whether that would include apples. Mexico has grown in importance to the Washington apple industry in recent years as trade barriers cost the industry marketshare in Asia, Schadler said.
Mexico now buys 40 percent of Washington’s apple exports, and the strong relationships that exist today mean trade will continue, even with tariffs, Schadler said.
“The risk is, of course, that additional pricing pressure caused by tariffs might reduce the volume of apples that Mexican buyers are willing to import from the U.S. and put even more pressure on profit margins,” he said. “Losing even a small portion of the volume that we send to Mexico would have real, negative impacts on our industry at a time when the industry’s economics are already stressed.”
This week, other agricultural groups decried the administration’s approach to tariffs. Dave Puglia, CEO of Western Growers, said the “looming threat of these tariffs” already prompted some Canadian retailers to cancel orders with American growers, and he warned that losing markets can have long-term impacts.
“Years after the China tariffs and the predictable Chinese tariffs imposed in retaliation on many of our members’ U.S.-grown products, our ability to sell into the Chinese market remains handicapped in no small part because other countries took advantage of the disruption and captured much of that market,” he said in a statement issued before the reprieve was announced. “This lingering economic harm is quite likely to be replicated this time on a broader scale as Canada and Mexico represent the top two export markets for fresh produce grown in the United States.”
Speaking of China, the new 10 percent tariffs on all Chinese imports took effect March 4. China responded with an additional 10 percent tariff on hundreds of products, including U.S. apples, pears and cherries, that takes effect March 10. That brings the total duty on U.S.-grown fruit to 65 percent, according to a bulletin from the Northwest Horticultural Council.
Canada’s first round of retaliatory tariffs took effect this week and includes 25 percent duties on cherries, stone fruit, citrus and many other agricultural products. A second phase of proposed tariffs, now out for public comment in Canada, includes apples and pears. •
—by Kate Prengaman
Would have been so easy to include in your report the tariffs that us apples face world wide currently. Wonder why that wasn’t included ?
The apple industry has been penalized (before Trump) by most of our trading partners.
It’s unacceptable and a large reason that growers are paid prices that do not cover costs.
David Puglia is a fool if he doesn’t understand the reasons preventing expanding markets for apples.
How unfortunate that you couldn’t include a counterpoint.