Tariffs on apples, again
Apple exported to Mexico are subject to a retaliatory 20 percent tariff.
U.S. apple producers enjoyed only a few months of tariff-free shipping to Mexico, their number-one export market, before the Mexican government imposed a 20 percent retaliatory tariff on fresh and dried apples this week. Mexico imports about 10 million boxes of Washington apples annually.
The new tariff is Mexico’s latest move in a dispute with the United States over cross-border trucking. In March, 2009, Mexico placed tariffs on 90 U.S. products, including pears and cherries, after the U.S. Congress terminated a pilot program that allowed Mexican trucks to haul goods to a U.S. destination and pick up cargo to return to Mexico. The program was part of the North American Free Trade Agreement.
Until March this year, some U.S. apples already faced a 45 percent tariff that resulted from a long-standing dispute with Mexico over allegations by Mexican apple producers that U.S. apple producers dumped apples in Mexico at below the cost of production. The tariffs, imposed initially in 2002, were finally eliminated in March.
This week, with no resolution to the trucking dispute in sight, more commodities, including apples, were added to the list of those subject to Mexico’s 20 percent tariff, according to Jim Archer, manager of Northwest Fruit Exporters.
“We’re not privileged to the processes inside the Mexican government, so I’m not sure how they arrived at this list, but apples are obviously a pretty high-profile product and high volume, so it creates some leverage,” he said.
He believes Mexico saw the trucking dispute as an opportunity to replace tariffs on apples. “We’re fairly sure in our minds that Mexican producers have been interested in restoring some sort of restrictions—tariffs or otherwise,” he said.
The anti-dumping tariff applied to only Red and Golden Delicious apples and only to some shippers, whereas the new tariff applies to all varieties shipped by all U.S. producers. Archer estimates that about 20 percent of the Washington apples shipped to Mexico are Gala.
“It’s just discouraging,” he said. “I’m sure the fruit will still move one way or another, but it will probably diminish the volumes and probably reduce the price.”
The U.S. Apple Association issued a press release urging the Obama Administration to act swiftly to resolve the trucking dispute. “Failure to act on this issue is hurting U.S. farmers and opportunities to grow U.S. exports,” said USApple President Nancy Foster.
The Northwest Horticultural Council announced that it was working with the Alliance to Keep U.S. Jobs (a national coalition of industries affected by the retaliatory tariffs) to put pressure on the administration to solve the problem.