China may slap more tariffs on U.S. cranberries, an often-targeted industry that has increased exports this year despite previous rounds of retaliatory duties, according to figures compiled by the USDA.
Pending higher tariffs on juice, concentrate and frozen cranberries may dampen ambitions to increase sales to China of what the industry brands “America’s Original Super Fruit,” but the new round won’t apply to a large share of cranberry exports.
Tariffs imposed last summer by China and Mexico on sweetened dried cranberries affected more exports. Also, the European Union and Canada levied duties on juice. So far, however, overall exports this year are up, driven by increased sales to other countries, according to numbers posted by USDA’s Economic Research Service.
U.S. cranberry exports through March totaled $92.3 million, compared to $83.5 million over the same three-month period in 2018, before retaliatory tariffs were levied.
Handlers have been working to develop markets in countries such as India, Japan and Australia, said Terry Humfeld, executive director of the Cranberry Institute, a trade association.
“Business has to continue. They’re directing efforts to other areas,” he said. “We’d still like to see free-market access to China because that’s where the potential is.”
The latest round of tariffs announced May 13 by China are due to take effect June 1 and will raise duties on thousands of U.S. products. China was responding to tariffs announced May 10 by the Trump administration.
Cranberries have been a frequent target in trade wars, purportedly because Wisconsin, by far the top source of U.S. cranberries, provides a politically sensitive target. Wisconsin is seen as a perennial swing state in presidential elections, and Wisconsin Republican Paul Ryan was House speaker when tariffs were imposed last year.
U.S. cranberry growers already are struggling with low prices caused by an oversupply. The USDA authorized volume controls in 2017 and 2018 to reduce inventory.
The forced cutbacks are not expected to eliminate the surplus, and farmers won’t be required to withhold any of their 2019 harvest from the marketplace.
With the U.S. consumption of cranberries flat, the industry has looked overseas, especially to China, the second-largest destination for prepared U.S. cranberries after the EU.
Sales in China had been steadily growing until this year. The value of prepared cranberries exported to China in the first three months of this year was $7.5 million, compared to $8.9 million last year.
China makes up about 11 percent of the export market for prepared cranberries.
“These tariffs are preventing the cranberry industry from expanding exports to the extent we’d like to,” Humfeld said. “It’s kind of slowed that whole process down.”
The EU imposed a 25 percent tariff on juice. Sales through March totaled $1.2 million, compared to $5.5 million the year before.
Mexico applied a 20 percent tariff on dried cranberries to respond to U.S. tariffs on steel and aluminum. The volume has dropped, but it’s been more than offset by higher prices.
The value of prepared cranberries exported to Mexico over the first three months was $7.8 million, compared to $6.4 million last year.
President Trump announced May 17 the U.S. was lifting the tariffs on Mexican and Canadian steel and aluminum.
Oregon and Washington are the fourth and fifth top-producing states, respectively. Two Northwest farmers said on May 17 they had not noticed the retaliatory tariffs having an effect.
Prepared cranberries make up about 80 percent of exports. Total exports, including juice and fresh cranberries, were valued at $360.9 million in 2018.