This article was originally published in the December/January issue
The ongoing ripple effects from the U.S.-China trade war have left a deep impact on American agricultural exports. Once a thriving market for U.S. produce, China has become increasingly challenging for American growers, largely due to steep duties imposed since 2018. In retaliation to tariffs that were introduced on imports into the U.S. from China, China implemented substantial tariffs on many imports from the U.S., making these products more expensive and less competitive, and forcing American agricultural producers to adapt. Years later, growers across the country continue to navigate redirected markets and unresolved trade tensions.
The initial tariffs by the U.S. targeted a range of Chinese imports, including washing machines, solar panels, steel, and aluminum. In response, China levied tariffs on $100 billion worth of U.S. exports, with American agricultural goods making up a large share of the total. The effects have reverberated through the industry, with fresh fruit exporters among the hardest hit.
According to the United States Department of Agriculture (USDA), U.S. agricultural exports to China in 2023 included specialty crops like tree nuts—by far the largest category, with exports of $1.2 billion—followed by fresh fruit, processed fruit, and processed vegetables, with exports in each of those categories valued at less than $100 million. For most of the categories, excluding tree nuts, export values have dropped substantially over recent years. U.S. fresh fruit exports, valued at $226 million before the tariffs, fell to $86 million in 2023.
Apples, cherries, oranges, and plums are some of the most important U.S. fruit exports to China. Yet these products have suffered considerable declines, with cherry exports falling from $119 million in 2017 to $43.7 million in 2023, and apple exports falling from $17.7 million to $8.7 million. The citrus category is also down from exports of $50.3 million to $28.2 million.
Mark Powers, president of the Northwest Horticultural Council, which is headquartered in Yakima, WA, and advocates for apple, pear, and cherry growers in Idaho, Oregon, and Washington, commented on the resilience of relationships between Chinese buyers and U.S. growers. “We’ve been shipping apples there since 1994. There’s a long history of shipping apples and cherries to China, and we recognize China is the world’s largest apple producer, but they still value the different varieties that we grow and are able to ship there,” he explains.
Despite this long-standing relationship, the introduction of tariffs led to an immediate drop in apple and cherry sales to China and Hong Kong in 2017, followed by a steady decline. “The height of shipments was prior to 2018,” notes Powers. “We’ve unfortunately lost sales since 2017 in part due to the retaliation. Cherries have dropped about 72% and apples are down 65%.”
The process of adapting to these trade shifts has been gradual for U.S. exporters. Initially, the retaliatory tariffs imposed by China were as high as 60%, though they have since been reduced to 55%, and certain products can now qualify for exemptions. This allows some items to be imported into China at a lower rate of 25%, offering some financial relief. The U.S. Trade Representative’s office established an exclusion process that permits importers to request tariff exemptions for specific products classified under a 10-digit Harmonized Tariff Schedule code, thereby reducing the financial burden on certain exporters.
Powers acknowledges that while the tariff situation has stabilized, the industry still faces constraints. “It’s overall impactful, but the majority of what U.S. growers produce is grown for the domestic markets. They’ve had to adjust sales and look for different markets. It’s unfortunate and puts a pressure on pricing, with fewer customers to sell to.”
Exploring New Markets: Southeast Asia and Beyond
Steve Reinholt, export business development lead at CMI Orchards, a Wenatchee, WA-based grower-shipper of apples, pears and cherries, describes China as once a top market for cherries and apples, especially the former. “Cherries relied heavily on the market,” says Reinholt. “We saw a general slowdown in volume going there, but since that happened we did adopt other destinations for the product, so the actual direct impact to the grower’s pocketbook, which is who we truly work for, hasn’t been major.”
Reinholt added other Asian markets such as Hong Kong and Southeast Asia remain stable, and there has been new growth in countries such as India following recent import duty reductions. “Central and South America are also growing markets for us at this time,” he adds, saying he expects those will be among the biggest growth markets in the future. Mexico, a longstanding trading partner of the United States, has also seen an increase in imports of U.S. produce, alongside newer markets like Malaysia and Vietnam.
California peaches still have not received access to the Chinese market
A key figure helping in efforts to expand export opportunities is Caroline Stringer, director of trade for the California Fresh Fruit Association (CFFA), a Fresno-based trade association that represents the state’s grape, blueberry, and tree fruit industries—with a focus on the stonefruit sector—on state and federal legislative and regulatory matters. She describes how her organization devised strategies to address the shifting trade environment. The medium-term goal focused on opening new markets quickly, while the long-term plan aims to develop those markets further. In the short term, the CFFA sought government assistance through programs that send surplus fruit to food banks.
Given the U.S.’s recent trade relationship changes with China, its withdrawal in 2017 from the Trans-Pacific Partnership—which later became the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)—and the disruptions caused by the Covid-19 pandemic, exploring new markets has become essential for many exporters. Stringer notes that CFFA has worked tirelessly to gain access to markets such as Vietnam and South Korea and recently secured entry for plums into Japan after years of effort.
For California growers, however, the difficulties remain significant. The decline in shipments to the Asia-Pacific region—a market Stringer highlights as critical to California’s fruit industry—has created significant challenges. “We’ve got this fruit; it’s good fruit, it’s premium quality, and we know Chinese consumers still want it. It’s just the prices—we’re not competitive price-wise with what’s available in China,” explains Stringer. From 2019 to 2023, California’s export volume to China decreased by 40%, and the value of these exports dropped by 22%, she says.
Stringer adds that her primary role is to reduce as many trade barriers as possible to help California’s growers access other markets and sustain their operations. However, she notes that retaliatory tariffs hindered the opportunity to establish U.S. nectarines in the Chinese market. “The tariffs were put in place when Phase One of the trade deal was signed; nectarines were granted access, but peaches still have no access in China,” she says. “Although we have access for nectarines, we’ve never been able to establish much of a foothold for them in the country, and I think it would take off once those tariffs are reduced.”
Stringer is hopeful that normal trade will eventually resume, benefiting both nations, but she acknowledges that this depends on negotiations between the two governments.
The Impact of Future U.S.-China Trade Relations
There is likely to be much uncertainty about how trade relations with China could evolve over the coming years. Higher tariffs have been threatened on all Chinese imports, a move that could significantly escalate the trade war. Economists at the University of California (UC) predict that California could be among the hardest-hit states if trade tensions worsen. The report Revoking China’s Preferred Trade Status Would be Costly for California Agriculture estimates that deteriorating U.S.-China relations could cost the state $1 billion annually.
Colin A. Carter, a UC Davis economics professor and co-author of the report, says that California has become increasingly reliant on China, to which the share of exports has quadrupled since the Asian country joined the World Trade Organization in 2001. Currently, 8.4% of California’s horticultural exports go to the Chinese market.
Reported discussions about revoking China’s Permanent Normal Trade Relations (PNTR) status—which currently allows China to trade with the United States at most-favored-nation rates—could bring further repercussions if that occurs. Losing PNTR would subject Chinese imports to additional tariffs. Tariffs of 60% have been proposed on Chinese goods, which would be the result of combining the current tariff level with non-PNTR duties and a possible general tariff on imports from all countries. The UC report foresees China retaliating with a 9.5% increase on imports of U.S. agricultural products, which it says could potentially cut California’s exports to China by a third.
“There’s a significant number of congressmen who would like to play hardball with China on trade,” says Carter. “If PNTR status is revoked, tariffs would increase, and trade barriers would go up.” California’s almond and other tree nut producers have already suffered from past tariffs, although the value of U.S. tree nut exports to China—mainly made up of pistachios and almonds—is significantly higher than it was in 2017.
The initial trade war reportedly caused almond prices to plunge by around 40%, while walnut prices dropped by approximately 65%. China, the second-largest market for California pistachios, also saw declines. “China is the third-largest market for almonds from California, and that’s a high-value crop that was significantly hurt by the previous trade war, and it still hasn’t recovered,” explains Carter. “Agriculture is politically sensitive, so this trade war has led to a major reduction in U.S. agricultural exports to China.”
Although the U.S. Government issued bailouts for Midwestern farmers affected by the trade war, California growers received limited assistance. “The trade war severely damaged the walnut industry, especially because China began producing their own walnuts,” says Carter. “So, that market is not coming back.”
Carter warns that the effects of current tariffs are already deeply ingrained in the U.S. agricultural sector. “These issues have long-term impacts that are costly to the domestic industry and will continue to shape American agriculture for years to come.”
It’s not just fruit and tree nuts that could be affected. China is a major market for U.S. soybean farmers, who have seen their exports to the market fall by almost a third since the trade war began. Another trade war could cost soy farmers between $3.6 billion and $5.9 billion in annual production value, depending on the course of the dispute, according to an October study by the National Corn Growers Association and the American Soybean Association.
Meanwhile, Philip C. Karsting, who headed up the USDA’s Foreign Agricultural Service (FAS), from 2013 to 2017, says that there are two things to be mindful of. “First, retaliatory tariffs (from China or anyone else) on U.S. agricultural exports put our goods at a comparative disadvantage to our competitors and often depress the prices our producers here in the U.S. receive.”
“Second, U.S. agriculture also uses imports (such as fertilizer and animal pharmaceuticals). In cases where that supply is concentrated in China, it could lead to higher input costs.” He also notes, “Tariffs can be invoked rather quickly—so time will tell.”
Trade Tensions Could Resurface
As American agricultural exporters continue to diversify to offset the steep tariffs imposed by China years ago, the industry’s shift to alternative markets has provided much-needed resilience. Regions beyond California, including the Pacific Northwest and Midwestern states, have refocused exports to other markets such as Southeast Asia, India, and Latin America, mitigating some trade war impacts.
Nonetheless, the future remains uncertain, and there is the potential for the conflict to deepen. Proposals to impose further tariff hikes on China pose risks for exporters, particularly for high-value crops that suffered during the initial trade war.
Striking the right balance between short-term adaptation and long-term stability will require both industry innovation and international collaboration. While diplomatic strategies play a critical role, the resilience demonstrated by U.S. agricultural exporters in diversifying markets and adopting new practices suggests that the industry is capable of navigating these challenges. Continued uncertainty may drive further adaptation, but the sector’s ability to adjust will remain a key factor in ensuring its future success.
