For many Americans, nothing is more comforting than a peanut butter and jelly sandwich. For decades, the American Peanut Council, through its export promotion program, has strived to share peanuts, including the iconic spread, with global consumers. With nearly one-third of U.S. peanuts destined for overseas markets, trade policies play a critical role in spreading peanut butter (and peanuts) throughout the world and are crucial to the health of the U.S. peanut industry. 

In 2023, the U.S. exported more than $900 million in peanuts (raw and processed) worldwide. As with many other agriculture commodities, non-tariff and tariff barriers continually pose the biggest challenges for peanut exports. Recent history has shown that either of these issues can completely derail a growing or even a mature market. 

On the issue of non-tariff sanitary and phytosanitary barriers that impede market access, meeting a country’s food safety requirements is critically important but also a continual challenge for peanuts. Depending on the growing conditions in any given year, peanuts are susceptible to aflatoxin contamination. Some countries, such as Japan, inspect 100% of every shipment to ensure that peanuts meet Japan’s import requirements. 

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Other countries, such as the European Union, have an import requirement for aflatoxin that is well below the international standard recommended by the Codex Alimentarius Commission. APC and its sheller members, in partnership with the Agriculture Department, have been working to build confidence with EU officials to improve compliance with the EU requirement and hopefully reduce the current 20% inspection rate.

APC is also providing science-based information to the Food and Drug Administration and USDA to maintain the current Codex recommendation for peanuts. The work is not easy, but one that is critical to be able to continue to maintain, grow, and diversify our markets.

The other challenge facing peanuts is tariffs, which have taken two forms. First are tariffs imposed by other countries on U.S. peanuts in retaliation for tariff actions that the United States has taken against those countries.

The peanut industry was hit hard by the EU’s retaliation to the 2018 steel and aluminum tariffs, which resulted in a significant drop in peanut butter exports. In 2018, the United States exported a value of $18.5 million in peanut butter to the EU. Two years later, sales had fallen 75% to $4 million and have yet to recover.  

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The other challenge for peanuts is competing against other suppliers in potential growth export markets, particularly when those other suppliers have tariff preferences resulting from trade agreements.

As APC looks to expand its export promotion programs to additional countries, ensuring that U.S. peanuts can be price competitive is a key factor.  For example, in the Philippines, U.S. peanuts face a 15% tariff, while Chinese peanuts face none.  Even in Indonesia, U.S. peanuts would only have a 5% tariff, but again, Chinese peanuts have no tariff applied. 

When tariffs are removed or lowered, the peanut industry has been able to get back into the export game because of the increasing global consumer demand for peanuts and peanut products. For example, we are already seeing benefits from the U.S.-Korea trade agreement, under which Korean tariffs on U.S. processed peanuts and peanut butter were eliminated in January 2021.

Since then, our exports have steadily grown from $8.5 million to more than $15.6 million in 2023. The U.S. peanut industry looks forward to Korean tariffs on U.S. peanuts being fully eliminated in 2026 to provide a new growth market for the industry. Besides Korea, we are also seeing growth in Japan since it lowered tariffs in 2020 under the U.S.-Japan Trade Agreement. Last year, Japan was the sixth-largest export market for U.S. peanuts, with $30 million in sales.

If the United States negotiated more trade agreements that lowered tariffs, as well as prioritized resolving sanitary and phytosanitary barriers, new market access opportunities would enable much-needed growth in our exports, which in turn support farm income and our rural communities.

For the peanut industry, it would allow us to do what we do best-spread the joy of America’s favorite nut to consumers around the world.

 Richard Owen is president and CEO of the American Peanut Council.