U.S.: 'Apples are often on the tariff carousel', says Washington Apple Commission

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U.S.: 'Apples are often on the tariff carousel', says Washington Apple Commission

The Washington Apple Commission has lamented the news that Canada may be considering implementing tariffs on imports of U.S. apples later this year in retaliation for U.S. duties on steel and aluminum.

The threat by the U.S.'s northern neighbor means that four of the six top apple export markets of Washington State - where around 80% of U.S. apples are produced - have either threatened or implemented new tariffs on U.S. apples over the last year.

Last year, China, the state's number-six market significantly raised tariffs on U.S. apples, from 10% to 50%, while Mexico, the leading export market, implemented tariffs of 20%.

In addition, India, which during the 2017-18 season became the state's third biggest export market, has for several months been threatening to implement a 25% tariff hike on U.S. apples.

Canada, the number-two market, is now also threatening tariffs, but it has not said at what rate they would be.

"Apples are often on the tariff carousel," said Todd Fryhover, president of the Washington Apple Commission. "It is a large target because of the fruit’s importance to the state and to the country."

Washington exports one-third of its fresh apple crop and the state accounts for 90-95% of all U.S. apple exports.

"Canada is on average our number-two market with an average 5 million boxes being shipped annually. The varieties moving into the market are diverse and it is the largest export destination for Washington’s organic apple category," he said.

"Washington is facing the possibility of our #1, #2, #3 and #6 having tariffs applied. Currently, the four markets with tariffs or threatened tariffs (Mexico, Canada, India, China) represent 51% of year to date total shipments."

India has proposed the tariff hike on U.S. apples - which would bring its rate to 75%, while all other overseas suppliers would remain on 50% - several times since it was first announced in August. In recent days it postponed again until May 2,  still hoping to instead negotiate with the U.S. Government to remove or lower tariffs on imports of Indian steel and aluminum.

"India is very important to Washington apples since it is our number-three market on average," Fryhover said.

"The last season there was a spike in shipment volume since Washington was able to fill the demand from China’s access to the market being closed, bumping it up to the #2 market for the first time. 7 million of the 8 million apples shipped to India last year were Red Delicious, the highest produced variety in the state. There has been a 56% decrease in shipments season to date."

The crop this season 12% lower year-on-year (118 million boxes vs. 133 million boxes), and exports are down 30%. Fryhover said it is unclear how much of the drop is due to to the smaller crop and how much is due to tariffs.

"Movement is flowing well currently, and we expect this to continue. Some markets will drop off as expected in the later months of the season but there are certain markets like Mexico, Canada and India that have demand for Washington apples all year round."

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