With about 30 percent of the fresh apple crop exported each year, maintaining competitiveness through international trade is a top policy priority for USApple. While not all growers export, trade is critical to the health and future of the entire industry.
The trade policies of the Trump Administration have created uncertainty for the industry as the U.S. chose not to sign the Trans Pacific Partnership (TPP) and continued duty free access to Mexico and Canada is uncertain. In addition, many of our top export markets are now imposing retaliatory tariffs against us in response to steel and aluminum tariffs levied against them by the Administration.
USApple is active in a number of coalitions and efforts working to draw attention to the long-term negative impact that market losses would have on the industry. Toward this effort, USApple staff and leadership are actively engaged in discussions with the Administration, the Congress and the media.
NAFTA & USMCA:
Apples have been a big winner under the NAFTA agreement. Since the enactment of the agreement apple exports to Mexico have quadrupled and those to Canada have doubled. Maintaining the agreement and duty free access to Mexico and Canada has been a top priority for USApple.
USApple is pleased with the new United States-Mexico-Canada Agreement (USMCA). The deal continues duty free access to Mexico and Canada while maintaining important dispute resolution provisions.
In March, President Trump announced plans to levy tariffs on the imports of steel and aluminum citing “national security” concerns. He did this by utilizing Section 232 of the Trade Expansion Act of 1962. Section 232 allows the President to take action against imports if an investigation determines that a threat to national security exists. This is the first time
Section 232 has been used since 2002 and only 26 investigations have been made since the Act was signed by President Kennedy.
Those countries impacted by the 232 tariffs are now retaliating, levying their own tariffs on U.S. goods and commodities. As a result, apples now face a 20 percent tariff into Mexico and 15 percent additional tariffs into China. India announced an additional 25 percent in tariffs but has delayed implementation.
In March, President Trump announced additional tariffs against China in response to China’s policies that effectively steal U.S. intellectual property. China responded in turn, adding an additional 25 percent tariff on apples. That total number is now 40 percent in addition to the 10 percent that was already in place.
On July 24, USDA Secretary Sonny Perdue announced a $12 billion trade mitigation plan for agricultural producers impacted by retaliatory tariffs.
The majority of those funds will be directed to soy, sorghum, wheat, corn, dairy, pork and cotton producers in the form of direct payments.
The Department plans to increase commodity purchases, including apples, for food banks and other domestic food programs. This program will be designed to complement and not displace other planned purchases. It will receive $2.5 billion in funding.
Finally, USDA is developing a new trade promotion program to be used in conjunction with the Market Access Program. The program will receive $200 million in funds.
USApplemet with key USDA officials administering the purchasing and trade components and relayed the impact of these ongoing trade disputes on the industry and suggestions for maximum impact. The first apple purchases were announced in early November.