In trade, like many American industries, citrus growers and shippers have had to deal with the longstanding trade war with China in particular, which has led the Chinese to increase tariffs and undercut U.S. exports to the world’s largest single market.
“We’ve been hammered by the dispute with China,” says Joel Nelsen, the recently retired president of California Citrus Mutual BB #:163392 Exeter, CA.
Casey Creamer, the newly appointed president of California Citrus Mutual, explains that the basic Chinese tariff is 20 percent (including VAT). As the dispute rose, the Chinese imposed retaliatory tariffs for a total of 60 percent for the 2019-20 season. In September, an additional 10 percent was levied, bringing the total tariff up to 70 percent for the 2019-20 season.
Consequently, American citrus is losing its market to Chile and South Africa. He explains that initially China imposed a 20 percent tariff on citrus, and then as the dispute rose, more tariffs were placed, taking it to 60 percent. For the 2019-20 season China now imposes a 70 percent tariff on American citrus, which has lost its market to Australia, South Africa, and Egypt.
California citrus is also facing challenges from imports.
“A lot of offshore fruit is coming in from South Africa and Chile,” Nelsen notes, as well as Spain, Colombia, Peru, and Mexico. Subsidies are part of the problem.
“Spain is heavily subsidized,” Nelsen adds.
The United States is fighting back with tariffs. In October, a 25 percent additional duty was imposed on imported fresh oranges, lemons, clementines, and mandarins. This applies to citrus from all member countries of the European Union, including Spain, a major source of citrus for the United States.
One bright spot was a trade agreement between the United States and Japan signed in October. The U.S. trade representative announced, “Japan will eliminate tariffs of up to 32 percent on U.S. oranges imported during the period of April through November in 5 years, while the tariff on U.S. oranges imported December through March will be eliminated in 7 years. Japanese orange imports from the United States in 2018 totaled $71 million. Japan’s tariff on lemons is already fixed at zero.”
In Florida, Andrew Meadows, director of communications for Florida Citrus Mutual, BB #:163418 Bartow, FL, contends that the main concern is the new United States-Mexico-Canada Agreement and how it will affect winter fruits and vegetables in particular (many of which come from Mexico).
The state’s juice orange industry has had “decades of challenges” from Brazil, its major competitor, says Meadows. “We’ve had issues with Brazil dumping juice. We’ve fought that battle successfully. We just want to make sure that with any new trade agreement, they play by the rules.”
*Correction: an earlier version of this story had incorrect figures on China tariffs.
This is multi-part feature on the U.S. citrus industry adapted from the January/February 2020 issue of Produce Blueprints.