July 9 has come and gone, a day U.S. President Donald Trump had planned to implement reciprocal tariffs on a number of countries. While several letters have been sent to countries that the president is targeting, including Indonesia, Malaysia, Japan, and more, threatening to increase tariff rates, countries such as Brazil are also suddenly finding themselves an increased tariff target.
Meanwhile, the president announced another pause on the new tariff rates, and now, August 1st marks the new date they are set to go into effect. So what does this mean for the produce industry?
© Seasons Farm Fresh
For now, it's status quo, says Nick Bernal of Seasons Farm Fresh, a company that imports items from Latin American, Caribbean, and Central American countries. "The global tariffs are at 10 percent on product imported into the U.S., and we're having to absorb that because a lot of customers don't want to pay more," he says. "We have been able to work with some more suppliers and shave off a little so they eat a little bit, the growers eat a little bit–everybody is eating a little bit of it. Ten percent is not ideal, but it's not catastrophic."
What Bernal is watching closely is the newly announced 30 percent threatened tariffs on product being imported into the U.S. from South Africa. "We do a lot in South Africa with lychees, and 30 percent is quite concerning," he says. "Though our season doesn't start until November, so we're just going to sit and wait."
The feeling of instability
What concerns Bernal is the volatility of the tariffs and the effect they have on the economy. "A lot of people are just forecasting as much as they can. However, like I said, now we'll just have to wait and see," he says.
© Classic Fruit Co.
That's a concern shared by Tom Conrado of Classic Fruit Company, which imports melons in the offseason from Guatemala. "The biggest thing about the tariffs and moving forward is the unknown. Is it going to happen? Is it going to be 10 percent?" he says.
As he says, with so much change the U.S. government is trying to implement, they are doing what they can to prepare in terms of forecasting costs and the effect of the tariff implementation on the company's bottom line.
Companies are also feeling it in their labor forces. "It's not just the cost of the tariffs. It's also about the labor needed on the U.S. side to track and make sure that everything is paid for and that the paperwork is correct," Conrado says.
At the same time, it's also affecting some demand. "It's holding up a lot of negotiations moving forward with customers for programs because of that unknown. It's a difficult situation," he says.
For more information:
Nick Bernal
Seasons Farm Fresh, Inc.
https://seasonsfarmfresh.com/
Tom Conrado
Classic Fruit Company
www.classicfruit.com
