China’s Ministry of Commerce put out a list of products in late March, warning of 15% tariffs on products including wine, fresh fruit, dried fruit, and nuts.   On April 1, the tariffs became reality.

The move is “in order to balance the Aluminum products impose tariffs on losses caused by Chinese interests” according to a Google translation of the announcement.

China is taking the measures against the 128 U.S. goods overall including steel pipes “if it cannot reach an agreement with Washington” CNBC reported.

The tariffs won't necessarily be all bad news, experts say.

"There was already a tariff or import duty on almonds in China already, I believe it stood at 10% and it now could increase," said Jonathan Hoff, CEO of  Monte Vista Farming Company.
 
"In China, with products that have had tariffs on them in the past, there's been a tendency for imports to go through Hong Kong, which is a free trade zone, or into Haiphong, Vietnam and go through gray channels," Hoff said. "Perhaps with this type of tariff the government will begin to crack down on those gray channels, which should help benefit legitimate importers."
 
The California Association of Winegrape Growers (CAWG) issued a statement today encouraging President Trump to avoid threats and tariffs:
 
"President Trump’s decision to address United States trade issues by use of threats and increased tariffs risks undoing decades of work and investment to grow California wine exports. Last year, California wine exports totaled $1.28 billion, with China and Hong Kong accounting for nearly $145 million of that total," said CAWG President John Aguirre.

“I urge President Trump to return our nation to a strategy of opening markets and resolving trade concerns through multilateral negotiations, like the Trans Pacific Partnership," Aguierre said in the release. "The current path of tariffs and trade wars is sure to result in tremendous harm to California agriculture and future wine exports.”
 
The partial list in the image above shows product codes matched to the agricultural products by Mike Knowles of Fruitnet, whose annotated list can be found here. The full announcement can be seen below at the bottom of this blog, and so is the list of products subject to the tariff, with product codes.

Beyond the items named in the image above, the list includes international tariff codes for several key U.S. and California agricultural exports, including the following products:

  • 08021100, Almonds in shell
  • 08021200, Almonds, shelled
  • 08023200, Fresh, dried, walnuts
  • 08023100, Walnuts, in shell
  • 22042100, Wine of fresh grapes
  • 22041000, Sparkling wine
  • 08061000, Grapes, fresh or dried

Will the Chinese moves have a big impact on prices? Each crop has its own market dynamics playing out. Almond prices rose recently following several freeze events that may impact yields this year, which could offset the impact of Chinese tariffs. More on the freeze here.

In recent years, almond exports to Asian export markets have grown rapidly. The Almond Board's position report shows 32% growth in exports to Asian countries in 2017/2018 versus the year before, with a 21% rise in exports to China.

For walnuts, the Walnut Board has worked to expand export markets, but China remains a small slice of the total.  China itself grows walnuts, but consumes a large percentage, which means it exports far less to other countries than California growers do. 

Below are USDA export stats from 2016 for tree nuts including almonds and walnuts.

Screen Shot 2018-03-23 at 11.38.40 AM.png

“Although China produces the most walnuts, they're not the leader in world trade, that's the U.S. at 67%," said Claire Lee, Assistant Marketing Director for the walnut board at a presentation for growers.

Ceres Imaging will continue to provide information for growers on this topic as it becomes available.

 

 

20180323070002975-2

 

20180323070002975-4

 

 

Industry trends Regulations

Back to blog

The difference between Ceres AI and other technologies I've used is the help I get from their expert team.
Jake Samuel, Partner
Samuel Farms
With Ceres AI we can take a more targeted approach to applying fertilizer and nutrients.
Brian Fiscalini, Owner
Fiscalini Cheese Company
These flights can cover way more ground and provide more insight than a dozen soil moisture probes — and it's cheaper to implement.
Patrick Pinkard, Assistant Manager
Terranova Ranch
The average Ceres AI conductance measurement from its imagery over the season has provided the best correlation with applied water.
Blake Sanden
University of California Cooperative Extension