The secondary impacts of the increased Chinese tariffs are causing concern for several different commodities that were not directly referenced in the collection of goods scheduled to receive higher Chinese tariff rates.
“What we’re concerned about is the indirect impact the tariffs are going to have on the California apple growers,” said Executive Director of the California Apple Commission Alex Ott.
California does not directly ship apples into China, but the higher tariff could cause a decline in export rates for other apple-producing states. “Once the tariff is in full effect, more than likely those exports to China will drastically be reduced and those apples will have to go somewhere,” Ott said. “The concern is that those apples could potentially put pressures on a domestic market, thus lowering prices and slowing a lot of the movement of not just California apples, but U.S. apples in general.”
There is already a very particular amount of time that the California apple industry can effectively market its fruit. If Chile is late with its production, it can shorten the early marketing opportunity. Similarly, if Washington is early it will affect the length of the window. Because of time constraints, disruption in the marketplace can cause significant challenges for California apples. “We’re kind of stuck right in between that niche window,” said Ott. “We like our niche window, we like where we’re positioned as the California apple industry, we just want to make sure that outside impacts of events that we can’t control don’t upset, pardon the pun, the applecart.”
The second part of Ott’s concern regarding the secondary impacts of the increased tariffs is the potential for this type of policy to set some kind of precedent in terms of trade deals. “What we don’t want are other countries to get the idea that they too can do the same, and then all of a sudden it does have a direct impact on California export markets,” Ott noted.