NW agriculture groups caught in trade skirmish crosshairs
China is retaliating against U.S. tariffs on Chinese steel and other goods with tariffs on what it says are $3 billion worth of U.S. agricultural and steel products.
Trade tensions between the United States and China endanger exports of wheat, cherries, apples and other farm products produced in the Pacific Northwest. The Trump administration has placed a 25 percent tariff on imported steel and aluminum and an additional tariffs on $60 billion worth of Chinese goods, including clothing, electronics and agricultural equipment.
Of the $3 billion targeted by China, about $2.2 billion was agricultural products, mostly pork but also including apples, oranges, cherries, grapes and nuts.
The rate is 25 percent on pork and recycled aluminum. It is 15 percent on fresh and dried fruits, nuts, wine, denatured ethanol, American ginseng and seamless steel pipes.
China did not say when its tariffs would take effect, but urged President Trump to negotiate a prompt settlement to avoid a trade war. China's actions also caused a slump in the financial markets.
U.S. Wheat Associates and the National Association of Wheat Growers issued a statement of concern about Trump's tariffs on the additional goods but said they agree Chinese policies create unnecessary trade distortions that hurt U.S. farmers and other industries.
R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) lauded all of Trump's tariffs, saying the United States was beginning to defend itself against unfair and imbalanced trade. The U.S. steel tariff was recommended in a Jan. 11 U.S. Department of Commerce study that found quantities and circumstances of steel imports are "weakening" the U.S. economy and "threatens to impair national security."
The $3 billion figure is China's estimate of the value of its imports, from January through October 2017, of the U.S. commodities it is targeting. The top is $1.5 billion worth of mostly frozen pork of various cuts and variety meat, waste and scraps.
Dan Halstrom, president and chief executive officer of the U.S. Meat Export Federation, noted that China was saying the commodities could be subject to tariffs and that it's "a cause for great concern in the pork industry."
Jim Heimerl, president of the National Pork Producers Council and a producer in Johnstown, Ohio, said tariffs will harm the rural economy. "No one wins in these tit-for-tat trade disputes, least of all the farmers and consumers," Heimerl said.
Last year, the U.S. pork industry exported $1.1 billion of product to China, making it the No. 3 value market of U.S. pork, he said.
'Serious negative impact'
U.S. tariffs come after an inquiry by the Office of the U.S. Trade Representative into China's practices related to technology transfer, licensing and intellectual property rights. The Trade Representative's investigation under Section 301 of the 1974 Trade Act determined that U.S. companies have lost billions of dollars from being forced by China to disclose intellectual property and to transfer technology.
"When it comes to trade, we expect all countries to follow international rules and to trade fairly," Heimerl said. "We also expect all countries to resolve trade disputes in a way that doesn't harm businesses, farmers and consumers."
China's retaliatory list includes $228 million in almonds, walnuts, pistachios and macadamia nuts. It includes $170 million in cherries $88 million in citrus, $41 million in grapes, $36.7 million in apples, $26 million in plums, $2 million in strawberries and $1.6 million in pears.
B.J. Thurlby, president of Northwest Cherry Growers, said a Chinese tariff would have a "serious negative impact" on Northwest growers. Of the $170 million worth of cherries exported to China last season, about $135 million is the Northwest and the rest is California, Thurlby said. About 3.2 million, 20-pound Northwest boxes went to China and Hong Kong last season, he said.
"The U.S. Apple Association is extremely disappointed that apple growers have been caught in the crosshairs of what seems will be a trade war between the White House and the Chinese government," said Jim Bair, president and chief executive officer of the U.S. Apple Association.
The apple industry worked hard for years to gain full varietal access to China in 2015, Bair said. It's the 10th largest export market with promise of growth, he said.
"Obviously China is a big market for us and we are disappointed with the retaliation," said Todd Fryhover, president of the Washington Apple Commission. The tariff will be 15 percent on top of the current 10 percent duty, he added.
Washington has shipped 973,328, 40-pound boxes of apples to China this season as of March 15, down 24.8 percent from last year at the same time due to fruit being too small, he said. Washington exported 1.78 million boxes to China from the 2016 crop and the commission spends close to $1 million in annual promotions there.