Both the US and China finally came to the first round of agreements on a trade deal in an ongoing trade negotiation between the two largest global economies.
When the US first announced the import tariffs on Chinese products, the Chinese government immediately responded with its own tariffs on American goods entering China and American farmers were one of the first on the chopping block for goods entering China.
From this point the conflict between the US and China only escalated to higher and higher tariffs levied on both sides. On April 2, 2018 tree nut farmers witnessed a retaliatory 15% tariff added to current import rates of all tree nuts entering China of US origin, and then only 3 months and 4 days later another 25% tariff was added in response to the tariffs being levied by the US.
Only months prior to this all out trade war, the US Pecan Growers Council had successfully negotiated the tariff on pecans entering China down to 7% from 10% prior and prior to that 14% and prior to that even higher. In fact the US Pecan Growers Council had been working in China for over a decade and with the Chinese government for several years.
The negotiations only stalled from that point, hearing hopes of an agreement only to be disappointed later with repeated news of a no deal. This lasted for over a year until finally in the second week of December the White House announced that negotiations had finally reached a middle ground in what is being referred to as “phase one” of the ongoing negotiations between Washington and Beijing.
The phase one trade deal contains substantial purchase of US agricultural products, somewhere around $40 to $50 billion of US agricultural products, and while China has already shifted purchases of corn and soybeans to other countries, tree nuts from the US will likely help fill the purchase requirements.
The US is the largest producer of both almonds and pecans on the planet and China’s economy has continued to import more tree nuts as consumers continue to raise their standard of living and their awareness of healthy foods. According to Bloomberg article, China’s import of tree nuts has increased 20% over the past decade. Even as the trade war heated up and tariffs became extremely high, China still continued to purchase US grown pistachios and almonds at increasing levels. Pecans were not as fortunate, and imports all into China all but dried up from the US.
American pecan growers are hopeful that the “phase one” trade deal will turn the tides for what was once American pecans biggest export market.