Ag Alert May 21, 2025

Tariffs Continued from Page 1

Australia was also the “big winner” in 2018 during Trump’s first tariff war, he noted, when the island nation im- plemented a free trade agreement with India, now the largest export market for California almonds. A side effect of U.S. high tariffs on Chinese imports is the sharp decline of incoming ships and containers to the ports of Los Angeles, Long Beach and Oakland, key gateways for California agricultural exports. This could result in big logistical challenges for U.S. agricultural exports destined for Asia in the coming months, Schneller said. “There’s quite a bit of uncertainty about the number of liner services that will be available going out, as well as empty con- tainers,” he said. David Libatique, deputy executive di- rector of stakeholder engagement at the Port of Los Angeles, said the port’s import volume has fallen 31% this month com- pared to the same time last year. He said he expects imports will continue to decline as cargo owners make final decisions on whether to ship their goods. The ports of Los Angeles and Long Beach handle nearly 40% of the container imports into the U.S. and 30% of all exports, with hay and alfalfa topping the list of agri- cultural exports. Ching Lee is editor of Ag Alert. She may be contacted at clee@cfbf.com.

With the clock ticking on the tariff truce, California farmers and their advocates should use the opportunity to target what they may want in key trade agreements, said a former top U.S. agricultural trade negotiator at a meeting of the California State Board of Food and Agriculture earlier this month. Under the administration’s deadline with most countries except China, U.S. trade officials have until July 9 to engage in “an unprecedented number of nego- tiations” on complex trade policies, said Darci Vetter, who led trade negotiations on agricultural issues during the Obama administration. The tight timeline and ca- pacity mean farmers should not “count on” U.S. trade negotiators “to be able to keep your product front and center,” she said. “Ninety days is nothing when you’re talking about a trade deal that usually takes years to negotiate,” Vetter said. “But there is now an opportunity.” The Office of the U.S. Trade Represen- tative has said it plans to concentrate on 15 to 19 top trading markets. One area to focus on, she said, is ensuring agriculture stays on the agenda. With the loss of some of the federal government’s key and most senior experts in trade negotiation, Vetter stressed the importance of giving U.S. trade representatives “accurate, actionable infor- mation” for the negotiations. “Spoon-feed those agencies in any way that you can with data and updated infor- mation,” she said, including from USTR’s latest National Trade Estimates report, which details foreign trade barriers that U.S. exporters face. Because there’s limited time to address more nuanced or thorny issues, Vetter sug- gested the initial trade agreements may end up being general commitments, with details to be worked out over time and benchmarks that countries must meet to avoid higher tariffs. USTR has hinted the agreements they seek with top trading countries will likely resemble the Phase 1 deal with China ne- gotiated during Trump’s first term. Vetter said she expects current negotiations will address some of the same topics central to that deal, including manufacturing, steel and aluminum, and the sale and import of automobiles. Agriculture-related items could also be on the plate, she said. It’s expected that the agreements will include requirements for trading coun- tries to make specific purchases of U.S. goods. The Phase 1 deal allowed U.S. beef to regain market access in China, for ex- ample. USTR has indicated it plans to prioritize nontariff trade barriers for U.S. specialty crops. Also during the meeting, representatives for California wine, almonds and process- ing tomatoes emphasized the importance of trade to their sectors and told the board they continue to monitor impacts and are engaged with trading partners and stake- holders to encourage dialogue and con- structive solutions. Julie Berge, vice president of commu- nications and member relations for the Wine Institute, said the group has been

A container ship berths at the Port of Los Angeles, which has seen its import volume fall by 31% this month compared to the same time last year due to U.S. tariff impacts on trade.

building relationships overseas for years, but recent actions by the Trump adminis- tration—and talks of annexing Canada— have stunted those efforts. Since March, Canada has banned all U.S. wine, beer and spirit imports—the only U.S. product category it has completely blocked. This retaliatory move has cre- ated significant economic harm to win- eries, Berge said, particularly small and mid-sized producers. When the ban was announced, product already labeled and enroute to Canada had to turn around, cre- ating huge logistical problems, she said, with producers still trying to figure out what to do with those shipments. “It’s tough times for the wine industry,” Berge said. “We’re facing many head- winds, so every single bottle sold matters.” Canada historically has been the No. 1 export market for California wine, with 35% of exports going to the north- ern neighbor. For California processing tomatoes, the Trump administration’s tariffs on steel imports will have major impacts due to the sector’s use of cans, a lot of which are tin-plated steel, said Mike Montna, pres- ident and CEO of the California Tomato Growers Association. The U.S. produces only 6% to 8% of the material, he noted, “so there is really no option to purchase it here.” “We went through this before in the first Trump administration,” Montna said, not- ing tariff exemptions then for Mexican and Canadian steel. To avoid tariffs on Chinese steel, processors were forced to make sourcing changes over time. Now with across-the-board tariffs on all imported steel, he said, “we know our cans are going to cost a little more,” and those costs will probably be passed on. Export trade remains crucial for pro- cessing tomato growers. About 20% of the state’s processed tomato products were destined for foreign markets during the past four to five years, Montna pointed out. Canada, Mexico, Netherlands, Japan and Italy are the biggest established ex- port markets, with Canada and Mexico taking 55% to 60% of the state’s total pro- cessing tomato export volume.

Until the deal with China last week, raw almonds from California faced 160% Chinese tariffs. Meanwhile, the Golden State’s main competitor— Australia—has a free trade agreement with China and enjoys zero tariffs on its almonds. “This situation has been very frustrat- ing for our almond exporters,” said Keith Schneller, senior trade policy specialist for the Almond Board of California.

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May 21, 2025 Ag Alert 23