Roughly six months after the first big round of tariffs went into effect, the cost to Americans from the country’s widening trade disputes with China and other nations is rising — with the biggest hit, not surprisingly, falling on trade-dependent states like Washington.
Between April and September, according to a new report, Washington farmers and other export-dependent producers saw foreign sales plummet by between 20 and 28 percent over the same period last year. The losses stem from tariffs on U.S. exports imposed by China and other trading partners in retaliation for import tariffs levied by the Trump administration.
The report, prepared by a trade-consultant firm using U.S. trade and census data, was presented at a Wednesday panel in Seattle as part of a national “Tariffs Hurt the Heartland” campaign sponsored by U.S. commodities trade groups hoping to break the current trade impasse.
Speakers on the panel included Frank Davis, vice president of sales for Washington Fruit in Yakima. Davis also spoke for the state and U.S. apple industry as a board member of both the Washington Apple Commission and U.S. Apple Association. Scott Dray, Walmart’s Yakima-based senior director for the company’s global food sourcing department, was also on the panel.
Among the Washington industries hardest hit in the trade war were agricultural producers, who were carefully targeted by China and other foreign governments as a way to pressure the Trump administration. That was especially true with perishable products like cherries, which must be exported during a narrow 11-week window.
Last spring, just as the cherry harvest was starting, China retaliated against U.S. tariffs on Chinese steel and aluminum by levying its own tariffs on U.S. farming goods, including cherries, Davis said.
The tariffs effectively closed off China to state cherry growers, who had to divert their product to other markets, such as South Korea, Taiwan, or the U.S. domestic market. But because these secondary markets were already well supplied with cherries, the extra shipments led to depressed prices and significant losses.
“It cut us in half,” said Davis, who noted that state cherry sales to China dropped from 3.2 million cartons in 2017 to 1.6 million cartons in 2018. All told, Davis said, tariffs cost state cherry growers an estimated $60 million to $80 million in profits.
It was a major damper on what would have otherwise been a top-notch cherry season. Northwest Cherry Growers said in a recent report producers reported a smaller — 25.3 million 20-pound boxes — but higher-quality crop compared to last year. With Chinese consumers willing to pay a premium for a higher-quality product, growers, prior to tariffs, would have received a strong return.
Without the tariffs, “we could have had a tremendous year,” Davis said. “But we ended up having an average year.”
Another less-than-tremendous result may await Washington’s apple growers, who recently finished their harvest and are now just testing an export market with new tariffs. State apple officials estimate that existing and threatened tariffs with Mexico, China and India, which together account for more than half of state exports, could mean between $120 million and $130 million in lost potential profits, Davis said.
It remains to be seen whether that business could come back, even if tariffs are eventually lifted, he said. Davis noted that both India and China have looked into purchasing product from other exporters.
“Other countries have the opportunity to get in and take market share from us that’s difficult to get back,” he said.
Wednesday’s panel, one of a series of “town halls” held around the country, was intended to increase public pressure on lawmakers to resolve the trade dispute by pushing the White House back to the negotiating table.
“We don’t want a handout from government,” said Davis, referring to recent moves to give government subsidies to trade-impacted industries. “We just don’t want our agriculture to be used as a pawn.”
• Yakima Herald-Republic reporter Mai Hoang contributed to this story.