Overall, American agricultural exports have recovered from the trade war with China that began five years ago, but many specialty crops still suffer from Chinese retaliatory tariffs.
“Writ large as a singular entity, ag exports have started to do well in China, but … when you break out those numbers, our industry is more of a mixed bag,” Tracey Chow, a federal government affairs specialist at the Western Growers Association, said. “Almonds have rebounded very well for a variety of reasons. Same thing for pistachios. But then you look at walnuts and table grapes and cherries that have just continued to slide even from their pre-trade war days.”
Beyond 2018, when the U.S. and China were hitting each other with retaliatory tariffs, U.S. exports took hits from the COVID-19 pandemic and bottlenecks at container ports that saw freight costs skyrocket. That muddied the waters when it came to the sources of pain for specialty crop exports to China, said Chow.
But exports of crops like almonds and pistachios rebounded, while others — like table grapes and apples — did not, the cause being the continued impact of Chinese retaliatory tariffs, according to industry representatives.
When the Trump administration hit Chinese steel and aluminum with Section 232 tariffs, China retaliated on a wide range of U.S. farm commodities. The U.S. then hit China with Section 301 tariffs to punish the country for theft of intellectual property, and China punched back with more tariffs on U.S. ag exports.
The countries finalized an agreement — the Phase One deal — in 2020, but it didn’t solve the tariff pain for many U.S. farmers. The Section 232 tariffs and China’s retaliation remained intact. The U.S. also did not remove the Section 301 tariffs, but China agreed that it would selectively and temporarily lift some of its 301 retaliatory tariffs.
The deal allowed U.S. soybean exports to resume at full speed, but it essentially killed U.S. table grape exports.
“China was one of our top five markets,” says Kathleen Nave, president of the California Table Grape Commission. “We opened it in 1997 and from 1998 on it was a top five market … until the tariffs in 2018.”
It was in April of 2018 that Chinese tariffs on table grapes jumped from 13% to 28%, a result of China’s retaliation to the Section 232 tariffs. That July, China retaliated to the Trump Section 301 duties, and the overall tariff on American table grapes rose to 53%. That increased to 63% in 2019 and then dropped to 58% as a result of the Phase One deal, said Jodi Devaurs, director of government policy and technical issues with the California Table Grape Commission.
Kathleen Nave, California Table Grape Commission
The U.S. exported 2.5 million boxes of table grapes to China in 2017, according to data compiled by the commission. In 2022, shipments totaled a meager 70,000 boxes.
Table grape exports overall were also impacted by the pandemic, bad weather and port issues, said Nave, “but we lost China and never regained it because of the tariffs.”
Unlike table grapes, which China has endeavored over the past years to grow domestically and succeeded to the point where it no longer needs U.S. supplies, imported pistachios have remained important for the Chinese market.
“They don’t grow pistachios in China,” says Jeffrey Gibbons, the plant manager for Setton Farms, a major California pistachio producer and exporter based in Terra Bella.
American almonds, pistachios and table grapes got hit by Chinese retaliatory tariffs. Unlike table grapes, however, the Chinese have been willing to grant exclusions for Section 301 tariffs on pistachios and almonds, allowing that trade to flourish.
Almond exports to China, not including transshipment through Hong Kong, totaled roughly $99 million in 2017, but shipments have risen sharply over the years, according to Western Growers data. The U.S. exported $240 million worth of the nuts to China in 2022.
As good as U.S. almond exports to China are now, China’s 15% Section 232 retaliatory tariff remains in place and trade could still be better, says Aubrey Bettencourt, president and CEO of the Almond Alliance of California.
“We would love nothing more than to have those retaliatory tariffs lifted … because [Chinese demand] is just demonstrating how much that product is wanted in that marketplace,” Bettencourt told Agri-Pulse in an interview.
With the exception of walnuts, U.S. tree nut exports to China have more than recovered their pre-trade war share of China’s imports, but that’s not the case for citrus fruit, deciduous fruit — like apples and pears — and other fruits, such as blueberries.
“China used to be a really good market for us,” said Mark Powers, president of the Northwest Horticultural Council, said of U.S. pear, cherry and apple exports. “It started with the trade war, but it’s continued. As far as we’re concerned, we’re still at war. It’s never stopped. The [Chinese] retaliatory tariffs are clearly the major impact.”
Cherries were hit especially hard, with U.S. exports to China dropping by 84% from 2017 to 2022, he said.
“We’ve lost hundreds of millions of dollars of sales since the tariffs went into effect,” Powers said.
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China was a relatively new market for U.S. pears in 2018 when American pears were hit with retaliatory tariffs. USDA celebrated the first shipment of a few containers of U.S. pears to China worth about $100,000 in February of 2013, but trade accelerated quickly. The U.S. exported about $800,000 worth of pears to China in 2017, but that was cut in half in 2018 and dropped to zero in 2019. Last year, the U.S. exported just $25,000 worth of pears to Chinese buyers.
U.S. apple exports to China were already dropping before the trade war, according to data from the Washington Apple Commission. While Chinese tariffs did hurt U.S. exports, a bigger issue is getting Chinese consumers to accept the new varieties like Honeycrisp and Cosmic Crisp that are being grown in the U.S., noted Commission President Todd Fryhover. China is the world’s largest apple-producing country, but about 70% of the apples Chinese consume are Fuji apples.
U.S. apple exports stopped falling in the 2020-21 marketing year after four years of decline and bounced back in 2021-22.
“Where we see the strength in those numbers … is that we see more and more proprietary varieties — high-value varieties — going to China,” Fryhover said.
Casey Creamer, California Citrus Mutual
Chinese retaliatory tariffs had an immediate impact on U.S. orange exports and continue to weigh on trade, but other factors such as domestic crop size, the pandemic and snarled shipping routes off West Coast ports were bigger issues, says Casey Creamer, president and CEO of California Citrus Mutual.
The U.S. exported 45,489 metric tons of oranges to China in the 2017-18 marketing year, but that dropped to 23,849 tons the next year.
“There’s no doubt that during the height of the trade war that citrus was impacted,” Creamer said, but also stressed that, because of the Phase One deal, orange exports have been able to avoid the bulk of China’s tariffs — the ones retaliating against U.S. Section 301 tariffs.
“There is no doubt that the numbers are off from pre-trade war, but you also have to figure in COVID, supply chain disruptions and how the world is trying to evolve since that point. So, I think to take where we’re at today and relate that to the trade dispute — I think that would be an exaggeration for citrus.”
China, for example, is trying to diversify its citrus import sources by buying more from countries like South Africa, Creamer said.
California citrus is still the premium in China — it’s what consumers there want and demand — but it’s going to take time to work its way back to whatever that new normal is, post-trade dispute and post-COVID.
And U.S. orange exports were stronger in 2021 at 31,076 tons, but that could have been stronger if not for the pandemic and West Coast shipping problems, Creamer said.
“There’s a whole lot of factors in there and my estimation, while [tariffs] play a role, they’re not the driving factor in the numbers to China like it was in 2019,” he told Agri-Pulse.
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