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Trade war casualty: The apple industry

In recent years, the United States has been involved in trade wars, and, like other kinds, trade wars have casualties.

One has been the apple industry.

“It has been challenging for exporting apple shippers to have to pay the steep tariffs that have evolved over the last few years,” notes Cynthia Haskins, president and CEO of the New York Apple Association BB #:153673.

“Exports in 2020-21 are down 20 percent from the previous season,” says Lindsey Huber, international marketing specialist for the
Washington Apple Commission BB #:160338, “while competition from other apple-growing areas is increasing continuously.”

One such area is Eastern Europe. Washington Apple Commission president Todd Fryhover told the Northwest News Network that Eastern European countries such as Serbia, Moldova, and Russia have been moving into Asian markets.

“They have [been] improving horticultural practices, and their labor is much less expensive than [for] us here in the United States.”

Furthermore, “China is becoming increasingly aggressive in the export arena,” according to Todd Sanders, chief executive officer for the California Apple Commission BB #:153589. “As they focus on the South East Asian sector, the U.S.A. is going to look at other markets to relieve pressure on the domestic market.”

Disputes with India have been at the forefront in recent months. In March 2019 the previous presidential administration removed India’s access to the Generalized System of Preferences, which gives certain developing nations preferential treatment in trade.

India retaliated by placing stiff tariffs on 28 American products, including almonds, walnuts, and apples. Shipments of American apples (mostly the Red Delicious variety) plummeted.

Huber explains: “India places a base tariff of 50 percent on all imported apples, and U.S. apples, the majority of which are Washington apples, currently face an additional 20 percent tariff.” (Washington apples account for approximately 95 percent of U.S. exports.)

“The most recent dispute with India that added the requirement of non-GMO certification to all shipments was another barrier for the industry.”

Huber is referring to an August 2020 stipulation by which the Indian market was “technically closed” to U.S. apples following new requirement for non-GMO certificate with each consignment,” reported the Asiafruit website.

The ruling, which came into force on March 1 following a three-month postponement, required some fresh produce imports to India—including apples, melons, plums, peppers, and tomatoes to carry proof they had not been genetically modified.

By an agreement later in March, the requirement for non-GMO certification was dropped.

“The issue has since been resolved,” Huber points out, “but the initial delay of the implementation, followed by actual market closure, created uncertainty and disruption in the market.”

“With a new presidential administration in place, there is certainly a chance that exports will improve,” says Chuck Yow, director of marketing for BelleHarvest Inc., BB #:104436 Michigan’s second-largest apple producer. “Unfortunately, exports are just one piece in an overall foreign policy process, and therefore it is unpredictable.”

 

Richard Smoley, contributing editor for Blue Book Services, Inc., has more than 40 years of experience in magazine writing and editing, and is the former managing editor of California Farmer magazine. A graduate of Harvard and Oxford universities, he has published 11 books.