Cherry Industry Among Those Hit by Chinese Retaliation

A growing Chinese upper-middle class has developed a taste for sweet cherries, and the Pacific Northwest grows more than any other U.S. region. In 2017, China bought about three million boxes, surpassing Canada as the top export destination.

This means fruit growers in the Pacific Northwest have taken a particular hit in the trade dispute between China and the U.S., losing up to $86 million on sweet cherries this summer, the Northwest Horticultural Council has estimated.

In April, China raised the tariff on cherries to 25 percent from 10 percent. Affluent Chinese kept buying despite the price hike. But after the U.S. imposed a 25 percent tariff on an additional $50 billion of Chinese imports, Beijing raised the cherry tariff again—to 50 percent on July 6, which devastated sales.

By then, cherry growers in the Pacific Northwest had spent the money to grow, harvest and pack their crop. Shelf life is short, and cherries can’t be stored like wheat. So growers are under pressure to sell at whatever price consumers will pay.

“Chinese importers were very forceful in accounting for the tariffs in their purchase price from us,” says Chris McCarthy, CEO of Auvil Fruit Company. “Chinese consumers will spend only so much, so the Chinese importers say: ‘Option A is I buy nothing. Option B is you lower your prices to account for what I pay as a result of the tariff.’ We lose all negotiating power or leverage in that equation because you can’t just sit on the supply and hope they give in.”

China has also used inspections to retaliate against U.S. goods, citing dubious concerns about pests and pesticides to ratchet up scrutiny on American fruit shipments, trapping them in port.

Source: Wall Street Journal