U.S.: Apples and cherries most affected by retaliatory tariffs, says report

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U.S.: Apples and cherries most affected by retaliatory tariffs, says report

Apples and cherries are the two most severely affected fruits by the retaliatory tariffs implemented on the U.S. by various countries over the course of 2018, according to a new report.

A report by the Congressional Research Service into the effects of the trade conflicts said that U.S. apple exports to Mexico and China are now subject to additional retaliatory tariffs of 20% and 40%, respectively, raising the total tariff rates to 20% and 50%.

"The two countries accounted for about 30% of the US$969 million of total U.S. apple exports in 2017," the report said.

"Mexico was the leading export market by value for U.S. fresh apples, importing $275 million in 2017, or 28% of total U.S. apple exports that year. Under NAFTA, U.S. apples were not subject to import tariffs in Mexico.

"China opened its market to U.S. apples in 2015, and the U.S. apple industry considers it to be a potential growth market. China imported about $18 million worth of U.S. apples in 2017 when the tariff rate was 10%.

India ranked third as a destination for U.S. apple exports in 2017, purchasing US$97 million of U.S. apples, or 10% of total exports.

The Indian government proposes to apply a 30% retaliatory tariff on imports of U.S. apples on Jan. 31, having pushed back the original implementation time of August multiple times to allow more time for talks.

Meanwhile, China has imposed a retaliatory tariff of 40% on U.S. cherries, raising the total tariff rate to 50%. 

"Demand for cherries has increased in China in recent years, and the United States has been a key source for filling that demand. U.S. producers exported $123 million worth of cherries to China in 2017—an increase of 68% over 2016 exports—accounting for 19% of total U.S. cherry exports that year," the report said.

"The steep retaliatory tariff may spur Chinese importers to look for alternative suppliers."

The value of U.S. cherry exports contracted by 19% year-on-year 2018 financial year from the prior year due in part to China’s retaliatory tariff, among other factors.

The other agricultural products that were hardest hit by the tariffs include soybeans, sorghum, cheese, pork, seafood and whiskey.

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