US citrus: No help from Phase One trade deal

Exports still burdened by 70% Chinese tariff

California citrus growers were hoping that the Phase One trade deal between the United States and China would boost their export prospects. That appears not to be the case.

U.S. citrus exports to China continue to trade subject to a 70% tariff, most of which was imposed to retaliate against Trump administration levies on Chinese goods beginning in March 2018. The resulting slump in exports forced more fruit onto the domestic market, causing a 10% drop in prices for navel oranges, the leading California citrus commodity. Navel prices are down by one-third since the 2017-2018 growing season.

China Citrus Exports Squeezed

China has historically been among the top five export destinations for California’s fresh citrus, but the most recent shipping season saw a drop of an estimated 50%. “Exports to China have slowed significantly and have put downward pressure on the domestic market,” said Casey Creamer, president of California Citrus Mutual, a trade association advocating for commercial citrus growers. “Pricing last year was the worst we’ve seen in recent memory.

“It’s no better now,” he added, referring to the aftermath of the trade deal.

It’s not hard to see why that’s the case. The Phase One trade agreement was signed on January 15 by President Donald Trump and China’s Vice Premier Liu. He included commitments by China to purchase an additional $200 billion worth of U.S. agricultural products, manufactured goods, energy, and services above 2017 levels over the next two years, including over $30 billion annually for agriculture. The Trump administration agreed to lower tariffs on imports from China, but tariffs remain in place on over two-thirds of their value, covering 93% of components imports and 69% of consumer products.

While calling for increased buying of U.S. agricultural products by China, the agreement doesn’t do anything for citrus growers specifically—while other U.S. agricultural products are mentioned by name. The lobbying of the U.S. Trade Representative by a leading House Republican apparently was to no avail.

“It is vital that fresh citrus is included in any Chinese purchases of American agricultural products,” Rep. Kevin McCarthy, the House Republican leader, who represents California’s 23^rd district in the Central Valley, wrote USTR Robert Lighthizer. “This would not only help ensure that California fresh citrus retains a presence in China, but would also mitigate the negative impacts growers experience due to Chinese tariffs on American fresh citrus.”