Caught in an ongoing trade dispute between the United States and China, California farmers and agricultural exporters say they continue to assess the full impact of new tariffs on their products.
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The Chinese government implemented new tariffs last week on U. Since then, the two sides have vowed to hit back with countermeasures, with China unveiling plans to impose a 25 percent duty on additional U. Those are set to take effect in June. Jim Zion, managing partner of Meridian Growers in Fresno County, said he was awaiting word on what to do with containers of pistachios that were already in transit to China when the additional 15 percent tariff went into effect.
The company also ships almonds, walnuts and pecans. Worst-case scenario is we bring it back to the United States if they say, 'We can't afford to buy this product with these additional duties in place.
Though his customers prefer to buy American pistachios, he said, some of them have already indicated they are looking elsewhere as a source for nuts, including from Iran. Zion said his company will now "double up" its marketing efforts in the U. Wine broker Joe Bica, who he U. Wine Exports in Ohio, said the new tariffs are "spooking a lot our clients," who have put holds on their orders.
Nearly all of the company's business is in California wines, with two-thirds going to China. A of his customers, he noted, have asked him to adjust prices to compensate for the additional 15 percent tariff.
The effect of the new tariff, he said, could make California wines scarcer in China and therefore more alluring and desirable. On the other hand, that market could dry up, he said, as it'll be more difficult for California to compete with lower-priced wines from Australia, Chile and Italy. What remains unclear, he said, is how China is handling exports going to Hong Kong, which has been a tax-free zone.
He noted that oftentimes, products are shipped into free-trade zones around China and duties are not assessed until the products are purchased and cleared through customs.
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Dan Sumner, director of the University of California Agricultural Issues Center, said much of the state's fruit and nut exports destined for China have long been shipped through Hong Kong. Unless China clamps down on Hong Kong imports, California agricultural products may still end up being consumed in China, he added. Steve Shamgochian, who markets walnuts for Mid Valley Nut in Stanislaus County, said China has not been a very big market for his company, especially now that Chinese walnut production has grown.
Last year, the U. With the new tariff, he said he'll probably focus more on those markets, though market opportunities change every year. China remains an important market for California, he said, and without it, "it's going to put more pressure on us down the road, especially if these crops get larger.
Though his export season for citrus fruit ended in March and he doesn't begin shipping table grapes until July, Chuck Olsen, founder and president of The Chuck Olsen Co. His hope, he said, is for the U.
With the additional 15 percent duty on top of the existing 10 percent, she said she expects exports to China will drop in half. During trade conflicts involving tariffs, she said perishable agricultural products tend to be likely targets "because the pain is immediate," as those products can't be stored.
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Though other stone fruits are on China's retaliatory tariff list, Martin noted only plums currently have market access. She said the association had been working on access for peaches and nectarines for more than 15 years and was hoping China would grant access this year, but with current trade tensions, there's concern it won't happen. California Farm Bureau Federation President Jamie Johansson said the new tariffs have implications for residents of California's urban centers as well as for rural communities. Many people in our urban centers work in marketing and export jobs tied to agriculture.
This situation will affect urban and rural Californians alike. Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee cfbf.
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