STREAMING NOW: Watch Now

Apples and cherries are at stake in China trade fight

Washington apples and cherries are caught in the trade fight between the United States and China.Beijing threa...

Posted: Mar 27, 2018 8:59 PM
Updated: Mar 27, 2018 8:59 PM

Washington apples and cherries are caught in the trade fight between the United States and China.

Beijing threatened last week to impose a 15% tariff on American fruit to retaliate against President Trump's tariffs on steel and aluminum. The Chinese trade penalty would especially punish Washington State, which ships more apples and cherries to China than any other part of the country.

"We're free traders," said Todd Fryhover, president of the Washington Apple Commission, a nonprofit group that promotes the industry. "Any disruption to that has a negative economic impact to our growers."

Gala, Red Delicious and Granny Smith make up 90% of the apples that Washington growers ship to China. The other 10% are more exotic varieties, including new types that the growers are testing.

"We get high dollar values for our products," Fryhover said.

Related: China may target American cherries, pistachios and sparkling wine

Last year, Washington growers sent nearly 1.8 million 40-pound boxes of apples to mainland China and another million to Hong Kong, according to data from the Washington State Tree Fruit Association. The shipments raked in $45 million to $50 million, and supported 1,260 jobs in the state.

China is an enticing market for American producers, explained Desmond O'Rourke, a retired professor of agricultural economics at Washington State University and an expert on the global fruit market. China has 1.4 billion people and a growing middle class able to spend on imported American food.

"The growth potential is what attracts everybody to China," he said.

Washington growers are vulnerable to protectionist policies because a third of apples grown in the state are sold overseas. Chinese tariffs on apples would raise costs for Washington suppliers - and could force them to hike prices for Chinese consumers to protect their profit margins.

Related: What happens when the world's two biggest economies turn on each other

That could make their apples less competitive for Chinese retail buyers and consumers than apples shipped there from Chile, France, New Zealand and Australia. China is also the world's largest apple producer, and its crop could become more appealing overnight.

For Americans, that means apple prices could fall. Washington growers may decide to sell more apples in the United States instead of shipping them to China, O'Rourke predicted.

O'Rourke said the harvest this September and October and competition from rivals will determine how much the tariffs will sting for Washington's growers.

Jim Bair, president of the US Apple Association, a national trade group, said last week that Chinese tariffs were the "latest chapter in a long and sad story where US apple growers get hurt in a fight we didn't start and in which we have no interest."

In 2015, the US Department of Agriculture reached an agreement with Chinese officials to fully open China to American producers after years of barriers on different apple varieties. Before 2015, growers could only export Golden Delicious and Red Delicious apples to China.

Then-Agriculture Secretary Tom Vilsack said at the time that the agreement would "result in high quality, fresh US apple varieties available for consumers in China and a significant boost in sales for American apple producers."

But O'Rourke said the Chinese appetite for Washington apples has failed to live up to producers' high expectations. China is a huge market, but only 5% of Washington apples go there. Mexico and Canada are the biggest importers.

Despite possible tariffs and sluggish growth, O'Rourke expects growers to continue selling in China. Restrictions "wouldn't be a death blow," he said.

The state's cherry growers may face a greater threat from higher taxes in China.

China is the largest importer of Washington's Bing and Rainier cherries. The country brought in nearly 3 million 20-pound boxes last year, and another 300,000 boxes were shipped to Hong Kong.

Those cherries sold for an estimated $127 million, according to the Washington State Tree Fruit Association.

Cherries are a profitable business for both Washington growers and wholesale retailers in China. The online market for them is also growing.

"There's a lot of excitement," said Mark Powers, president of Northwest Horticultural Council, a growers' trade group in Yakima, Washington. "They love our cherries."

Powers said it was difficult to predict the impact of the tariffs, but "either the price to the consumer goes up or the return to the producer goes down." He hopes the United States and China would reach a solution before peak season begins in June.

While Washington's apple producers can redirect sales from China to other major markets, the state's 1,400 cherry growers depend on the Chinese market. And the country relies on American cherries because China's growing capacity is less developed than its apple industry.

"We can't just easily switch markets from China," Powers said. "There is no other market that can take that kind of volume."

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 74119

Reported Deaths: 905
CountyCasesDeaths
Multnomah17242236
Washington10347101
Marion9207140
Clackamas616077
Umatilla434349
Lane430942
Jackson382531
Malheur240644
Deschutes236815
Yamhill172916
Linn142423
Polk125016
Douglas93018
Klamath8724
Jefferson83411
Benton7917
Union7826
Morrow6587
Lincoln62215
Josephine5374
Wasco53019
Columbia5063
Coos4253
Hood River4011
Clatsop3600
Baker2813
Crook2296
Curry1352
Grant1341
Lake1321
Tillamook1310
Harney991
Wallowa713
Gilliam230
Sherman230
Wheeler30
Unassigned00
Eugene
Broken Clouds
49° wxIcon
Hi: 50° Lo: 33°
Feels Like: 49°
Corvallis
Few Clouds
50° wxIcon
Hi: 50° Lo: 33°
Feels Like: 50°
Roseburg
Scattered Clouds
51° wxIcon
Hi: 52° Lo: 35°
Feels Like: 51°
North Bend
Clear
52° wxIcon
Hi: 54° Lo: 38°
Feels Like: 52°
KEZI Radar
KEZI Temperatures
KEZI Planner

LATEST FORECAST

Community Events