California Citrus and Chinese Tariff Exemptions

Tacy CalliesCalifornia Corner, Trade

California

The latest development in the Chinese market came as welcome news for the California citrus industry, as China moved to implement tariff exemptions. California Citrus Mutual President Casey Creamer explained that the tariff reduction is coming at an important time for the industry.

“It’s probably the break we’ve been looking for when it comes to citrus movement to China,” Creamer explained. He said that as of March 2, 35 percent of those tariffs came off. “So that’s good news for our growers as we hope to regain some of that lost volume that we were shipping to China.”

The removal of the Section 301 Tariffs comes after the other recent progress made in the tariff conflict with China with the establishment of the Phase One trade agreement. These developments should provide a notable amount of relief for the California citrus industry, which has been dealing with a tariff rate that totaled 70 percent.

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“We had an initial 15 percent additional tariff from the 232 aluminum and steel retaliation, and then we had a 25 percent, and then an additional 10 percent,” Creamer explained. “We’ll still wait to see how this all unfolds. We’re still waiting for the U.S. government to do some more translation and provide a report based upon this process. But so far this looks … like some good news for citrus growers.”

California growers are looking at the positive momentum with the trade relationship between the United States and China with tempered optimism. There is still concern regarding pricing, as Creamer noted that prices the past few years have been below average and below the cost of production.

While the tariff exemptions should have a positive impact, there is also uncertainty as to how the coronavirus is going to influence markets. “There’s a lot of concern still even though these tariffs are coming off. I think this is a step in the right direction. The proof is going to be in … how much volume is being moved and at what pricing,” concluded Creamer.

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Len Wilcox

Correspondent at Large for Citrus Industry Magazine and AgNet West