Cherry Exports Souring with China Tariffs
Date: Friday, July 20, 2018
Source: American Shipper
Cherry producers in the Pacific Northwest are experiencing the harsh realities of retaliatory import tariffs imposed upon their fruit by China.
The region produces about 80 percent of the sweet cherries sold throughout the United States, and one-third of this production is exported overseas.
During last year’s season, China surpassed Canada for the first time as the top export market for Pacific Northwest cherries, even though U.S. cherry exporters paid a 10 percent tariff to ship this fruit to China due the United States’ most favored nation status. It’s estimated that 11 percent of the region’s total cherry exports, valued at about $130 million, were shipped to China during the 2017 season.
On April 2, China imposed an additional 15 percent tariff on U.S cherries shipments in retaliation for the United States’ Section 232 tariffs imposed on steel and aluminum. This was followed on July 2 with China imposing an additional 25 percent tariff on cherries in retaliation for the U.S. Section 301 tariffs imposed on Chinese products due to alleged intellectual property violations. The tariff rate on Pacific Northwest cherries now totals 50 percent.
Cass Gerbers, president and CEO of Gerbers Farms in Brewster, Wash., one of the largest U.S. producers of sweet cherries, told members of the House Ways and Means Committee’s trade subcommittee Wednesday that of the estimated 5 million boxes of cherries produced by his farm this season, about 1.5 million boxes had been planned for the China market. The farm has since trimmed this order for China by two-thirds.
“With the recent tariff actions our customers have canceled orders and redirected our program downwards by approximately 1 million boxes, thus forcing all of this orphaned fruit into the U.S. domestic market or potentially elsewhere in the world, pushing down prices with the extra volume,” he said in his prepared testimony.
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