WENATCHEE, Wash. — The end of a 20% tariff on U.S. apples into Mexico is good news particularly for Washington growers who have long enjoyed Mexico as their No. 1 export market.
The Trump administration announced on May 17 that it is ending steel and aluminum tariffs on Mexico and Canada. In response, those two countries ended retaliatory tariffs on U.S. goods. Canada had no tariff on U.S. apples, but Mexico placed a 20% tariff on U.S. apples last June.
“It’s a real positive for the industry. Year-to-date we’re off more than 20% from last year. Hopefully, there’s opportunity for more movement and some slight price increases this season yet and it’s a big positive going into next year as well,” said Tim Evans, general sales manager of Chelan Fresh Marketing in Chelan, one of the state’s largest marketers.
As of May 15, season-to-date shipments to Mexico are 6.2 million, 40-pound boxes, down 29.3% from a year ago due to the tariff and a smaller crop, said Toni Lynn Adams, spokeswoman for the Washington Apple Commission in Wenatchee.
Evans said the season should finish at 8 million boxes into Mexico or more.
“The 20% an importer has to pay the (Mexican) government is a big spend. Removing that establishes a much better market,” he said, noting overall prices have not been as good this season as the industry would like.
“The removal of the 20% tariff is great news for the apple industry. It will be great to end the season on a positive trade note with our No. 1 export market and start the new season with open trade,” Adams said.
“Mexico is one of the few export markets that remains fairly strong late in the season, so removal of this tariff will certainly have an immediate, positive impact,” said Kate Tynan, senior vice president of Northwest Horticultural Council in Yakima.
The tariff caused a drop in sales to Mexico for the last three months of the 2017-2018 sales season. Sales for that season finished a little under 14.1 million, 40-pound boxes.
Prior to the tariff, shipments had been 13% greater than the year before and were on track to exceed 15 million boxes worth an estimated $241.8 million, Todd Fryhover, Washington Apple Commission president, said last June.
Washington shipped 13.7 million boxes of apples to Mexico, valued at more than $215 million in the 2016-17 season, Fryhover said.
It’s also encouraging, Tynan said, that the agreement with Mexico includes a provision to limit any future retaliation due to concerns regarding steel and aluminum to steel and aluminum products only, shielding tree fruit growers from harm over any future disagreements on the issue.
The Trump administration ended the steel and aluminum tariffs in an effort to ratify the new U.S. Mexico Canada (trade) Agreement in Congress. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and others in both political parties have said the tariffs needed to end before they would consider USMCA.
“Removal of the Section 232 (steel and aluminum) tariffs and ratification of USMCA has been our top priority,” said Jim Bair, president of U.S. Apple Association in Vienna, Va.
He said he “commends” the Trump administration for removing the tariffs and welcomes the return of duty-free access for U.S. apples into Mexico. He said Mexico and Canada, the two largest U.S. apple export markets, together represent a $500 million annual market.
“Time will tell whether removal of the tariffs is enough to push USMCA across the finish line in the House and Senate,” Tynan said. “There’s no doubt that it is a very positive step forward.”