Farmers nationwide are feeling the effects of new tariffs announced by China on April 2, but California growers have been hit the hardest. Secretary of the California Department of Food and Agriculture Karen Ross met with local farmers Thursday in Lodi to highlight just how devastating the roughly $500 million in new duties on the nation’s agricultural goods is to the state’s economy.
On March 8, the Trump administration announced global steel and aluminum tariffs to protect U.S. producers, exempting many nations – but not China. The country fired back at America by levying 12 to 25 percent tariffs on $3 billion worth of American goods, including scrap aluminum, frozen pork, dried fruits, nuts and wine.
The tariffs greatly impact California’s almond, walnut, wine, cherry and many other commodities, increasing the cost of exportation, depressing the prices of farm futures and harming trade relationships that have taken decades to develop.
Ross, along with California Farm Bureau Federation President Jamie Johansson and Farmers for Free Trade Executive Director Brian Keuhl, spoke about the tariffs with Aaron Lange of LangeTwins Family Winery and Vineyards, Lodi Farming Company President Jeff Colombini and California League of Food Processors President and CEO Rob Neenan at LangeTwins on Thursday, where each shared how the tariffs will affect a state that exported more than $2 billion in agricultural products to China in 2016-2017.
“California means something in our foreign markets…we don’t appreciate being a bargaining chip in brand international deals, and we know the benefits that come to us if we have free and fair trade,” Ross said. “Being able to negotiate bilateral and multilateral trade agreements is critical to our continued success.”
Lange shared the immediate impacts of the tariffs on his winery, which, when announced, resulted in an importer from China cancelling an order.
“It was a small order, but it was the beginning of a new relationship with an importer in China and it was cancelled almost immediately,” Lange said.
Another, larger order of 700 cases of wine that was set to be sent to China has also been put on the back burner, he added.
“That’s been put on hold to try and negotiate who is going to pay this extra 15 percent, and right now, I guarantee you it’s going to be coming partly out of our pocket to make sure we can maintain access to the China market,” he said.
The crops that will be hit the hardest include almonds, which could face an additional $28 million in duties, walnuts, which could see a $4 million increase in duties, pistachios, with a whopping $99 million in potential additional duties and wine, which would receive $29 million in additional duties.
Also affected in California are oranges, grapes and apples, the latter of which could face up to $8 million in potential additional duties.
Colombini, who farms apples, shared not only the affect the tariffs could have on supply issues, impacted if there is an excess of apples in the country after being unable to find trade partners overseas, but also the impact on the people living and working in the ag industry in California.
“Free trade is not just important to me, it’s important to more than 200 employees from my operation that rely on their jobs to support their families,” Colombini said. “When you think about all the many businesses and their employees who process, pack, sell and transport my farm products…they all benefit from a robust market made possible by free trade.”
Free trade is essential to the success of our agricultural economy, each speaker argued, and Keuhl pointed out just how vital trade is to the livelihood of each individual farm in not just California, but the entire country.
“Twenty percent of farm revenue nationwide comes from trade. If you take that 20 percent away from any farm – it doesn’t matter how well a farm is doing – if you take 20 percent of the revenue off the table, that farm is going to go under,” he said. “That’s how important trade is to U.S. agriculture.”
U.S. Agriculture Secretary Sonny Purdue reassured farmers last week that President Donald Trump will not leave them to take the brunt of China’s retaliatory tariffs and said the USDA and the administration are working on solutions to market issues.
To those who spoke in Lodi on Thursday, the issue is not a complex one: Put farmers first, said Keuhl.
“It’s about our livelihood and our lifestyles. What we need is individual farmers speaking and supporting trade and telling their stories,” he said. “This isn’t complicated; this is about markets and selling products.”