Though China is reducing by half the tariffs it placed on US citrus shipments, the initial tariffs will be left on the fruit, offering little if any comfort to US citrus exporters. The reduction goes into effect today, February 14, 2020, but the impact won’t be felt until the rest of the agreements are fleshed out between the two nations. The tariffs have already had a deep impact on US citrus exporters as 2019 numbers were only $23 million, 56% lower than 2018 and 54% lower than 2017.
The lack of exports of the US citrus crop can cause prices fall dramatically from oversupply – if the fruit isn’t being sent overseas, it has nowhere to go but to market here. The US Department of Agriculture has stepped in with $104 million in aid to help the citrus industry during the trade war.
China isn’t long for lacking citrus fruit; Turkey has been working to become the fruit basket of the Middle East, and wants to sell citrus in China. Currently, the import process from Turkey doesn’t suit citrus fruit getting to market fresh, but there are hopes in Turkey that can change. It’s their stated goal to supply honey and hazelnuts to China as US exports face heavy tariffs. Citrus is a big industry in the US. The California Navel Orange crop alone encompasses 73 million cartons.
With Citrus season already underway, we are already seeing the effects first hand. Include the added crisis of the Corona-virus, trade with China continues to be challenging. The government aid and the phase one tariff reduction is a mere band aid. Our citrus customers are enduring the trade war, remaining hopeful for a swift resolution to avoid permanent business losses to competing foreign countries. They continue to power on by drawing their focus on neighboring countries like South Korea and Japan and we here at Coppersmith continue to support their interests by remaining informative and by continuing to provide our exceptional level of customer service.