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Apples, pear and cherries are the fruits which have been included in the EU’s list of extra-tariffed products from the US. The European Union was not very much dependent on America’s fruit, rather the imposition of extra duties on such products is, mainly, aimed to hurt the local growers. The research on US fruit imports from the EU and China shows- the imports are low-priced due to low cost of production, packaging and processing, and this lower cost was due to low input cost of labour.
Low labour cost in China as compared to the US
US higher prices of fruit are, mostly, due to strict regulatory practice, regulation related to land use, pesticides and worker compensation. California fruit production was widely hit by these regulatory factors. A number of fruit growers in US are multinational companies where the production is based on business requirements of global standards and for the global customers. In China, the labour intensive fruit farming takes place on small scale as labour is abundant in China. Hence, the cost of production in China is one-tenth of the cost of US.
In May 2018, China imposed check on fruit import from the US and also additional duties. Every batch of fruit from US was subjected to intensive seven rounds of checks at Shenzhen by the Chinese officials since Nov 2017.
Impact on China’s imports of US Cherries
China is third largest buyer of US cherries and trade tensions post-G7 initiated a chain reaction where the cherry growers in the US are now worried of the export loss. China imposed tariff on US cherries (25 per cent) which will be effective from July 6, and this will hit the Northwest US suppliers. Both China and the US exporters believe the impact of trade tensions will extensively hit agricultural goods. About 1400 cherry growers in US West of Washington and elsewhere - in the Pacific Northwest, will suffer from the new trade obstacles imposed by EU and China. If the fruits do not reach the buyers, most of the cost will be paid by the growers.
Turkey exports increase
At the same time, the change in trade situations will be beneficial for Turkey cherry exporters who recorded a new hike in cherry exports since trade tensions, where cherry exports from Turkey rose by 184 per cent in the first five months of the year. About 85,000 tons (value $200 million) of seven rounds of checks at Shenzhen cherry have already been exported. Last year during this season - the export value was up to $54 million.
Impact on Mexico and Canada fruit trade
Four-fifth of total fruits imported in US comes from Mexico & the Caribbeans that provide up to 80 per cent of the total fruit imports. The fruit avocadoes are imported from Mexico and grapes from Chine and Peru. Berries (Cranes berries and Bilberries) are imported from Canada (and Argentina) as per 2017 International Trade Centre stats. Canada plans to impose additional 10 per cent tariffs on fruit puree, berries, nut puree, jams, orange juice and maple syrups.
The topmost imported fruit is banana imported from Guatemala, Ecuador and Honduras. At least 10 per cent of total apples exported from US go to Mexico. Mexico recently imposed 20 per cent tariffs on US apples.
To get some latest updates on US and China fruit trade, and the trade war, click 99 Alternative – (http://www.99alternatives.com).
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