What does the trade war mean for California Valley agriculture?

Trump, through tweets and via his trade representatives, is dueling with China over allegations that Beijing steals trade secrets, forces foreign companies to hand over technology, and unfairly subsidizes Chinese businesses. The tactics are generally part of China’s ambitions to become a global leader in advanced technologies.

But a dozen rounds of negotiations between the U.S. and China have yet to produce an agreement. Earlier this year, frustrated with a lack of progress, Trump raised tariffs on about $200 billion of Chinese imports by 15 percentage points to 25 percent. On Aug. 1, he threatened to impose the additional tariffs on Sept. 1.

While negotiations are expected to resume in September, the prospect of more American tariffs have prompted China to weaken its currency, the yuan – a signal that China plans to get tougher with the U.S. rather than back down.

Impact on Valley crops
In the meantime, products grown in California face tariffs that effectively raise the cost of their products in China by anywhere from 15 to 90 percent, depending on the commodity.

The most recent increase in tariffs came in May – and products of most significance in the Valley are among those bearing the brunt.

Almonds exported to China, for example, are subject to a 50 percent tariff, while dairy products face up to a 40 percent tax.

Other tariffs include a tax of 26 to 65 percent for cotton, up to 55 percent for oranges or related products, up to 50 percent for beef or beef products, and 60 to 65 percent for walnuts, according to information from the U.S. Department of Agriculture’s Foreign Agricultural Service.

Fresh tree fruit such as cherries, plums and apricots are slapped with 50 percent tariffs; for dried fruit, tariffs are 50 percent on raisins and 65 percent on dried apricots and prunes.

The cost of tariffs on Chinese goods by the U.S. does not include the expense of subsidies paid by the Trump administration to farmers across the U.S. — including California and the Valley — to make up for their potential lost sales to China.

More than $8.5 billion in payments was made to U.S. farmers. Farmers in California received about $76.3 million in federal subsidy payments for economic harm they may have suffered.

Delay on more tariffs
Sparking a 400-point rally in the Dow Jones Industrial Average, the United States Trade Representative said Aug. 13 the U.S. will delay tariffs on some imports from China until Dec. 15.

The three-month delay from the previous effective date of Sept. 1 will apply to a 21-page list of Chinese products, including live mushroom spawn, nuts, selected vegetables, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing, according to a news release.

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