A Tough Nut to Crack: How Tariffs Are Affecting the US Almond Industry

Close-up image of peeled almonds.

Almonds are one of the most popular nuts on the planet. Delicious and nutritious, they are beloved across the globe and are an important ingredient in many dishes. The sunny state of California is one of the biggest producers of almonds in the world; This year, farmers expect to hit a record-breaking harvest of 2.45 billion pounds of almonds.

Normally, this would be cause for celebration, since almonds are an especially lucrative product for California – the Golden State’s almond industry currently supports over 100,000 jobs and accounts for approximately $11 billion of the state’s economy.

However, instead of being roasted and seasoned with salt, this surplus of almonds is being roasted by escalating Chinese tariffs.

Tariffs Targeting Agricultural Exports

Earlier this year, President Trump implemented steep tariffs against offshore aluminum and steel. While many countries reciprocated with counter-tariffs of their own against American-made products, China reciprocated with the most extensive range of retaliatory tariffs, affecting approximately $60 billion worth of Made in America products. The Chinese government plans on imposing tariffs on up to $130 billion worth of goods, which basically accounts for almost all of US goods imported to China.

One of the US’s main sources of income in the global market stems from food and beverage goods, including agricultural products. Countries all over the world purchase US pork, corn, soy, and many other products. China, who has taken an aggressive approach to selecting which products to impose tariffs upon, has made no secret that it plans to hit agricultural products hardest. This includes almonds, of which the US produces and exports approximately 80% of the global supply.

In the past decade, China has become one of the largest export markets for American almonds, with hundreds of millions of pounds exported over the past few years. In implementing a 50% tariff against U.S. almond exports, Chian is sending a clear message. 

Because American almond producers are highly dependent on exports to China, this tariff is extremely disruptive to their business in multiple ways. Not only do they have to raise their prices to cover the tariff costs, China can also opt to purchase cheaper, un-tariffed almonds from Africa and Australia.

Plus, as the Wall Street Journal reported in July, China also “quietly closed a trading loophole that for years allowed large volumes of American almonds to be transported into the country via Vietnam without incurring import taxes.” It’s likely that the Chinese government will continue to systematically shut down similar trade routes.

While the almond agricultural community is apprehensive about the future, it’s still too soon to tell how long this trade war will go on, and how much damage, if any, will be done.

 

Image Credit: Amawasri Pakdara/Shutterstock.com

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