San Joaquin Valley farmers could end up being the big losers if a trade war breaks out over President Donald Trump's tariffs on imported steel and aluminum.
Under the president's plan, a 25 percent tariff would be imposed on steel and 15 percent on aluminum.
But agriculture industry leaders know from past experience that retaliatory tariffs on U.S. products may be coming. And California agriculture could be sitting in the crosshairs.
California's farm exports totaled $20.59 billion in 2015, with almonds the top exported product at $5.14 billion. Almonds are also Fresno County's top crop, valued at more than $1 billion.
"This could be a huge issue for agriculture," said Jim Zion, managing partner of Meridian Growers in Clovis, a grower and marketing company specializing in tree nuts.
Zion said China, Japan and Korea, who will be hit by the tariffs, are major buyers of tree nuts, including almonds and pistachios.
"Those are some of our biggest markets and there is concern about the backlash that may be coming," Zion said. "It has happened before."
In 2009, Mexico slapped retaliatory tariffs on the U.S. after federal officials ended a pilot program allowing Mexican trucks on American highways. For California farmers, the tariffs ranged from 10 percent to 45 percent on certain fruits, vegetables and nuts.
U.S. Department of Agriculture officials estimated the dispute cost U.S. businesses more than $2 billion. Farm exports to Mexico tumbled 27 percent.
Secretary of Agriculture Sonny Perdue said in a story on www.agriculture.com that the farm industry is “rightfully concerned.” “There is probably some legitimate anxiety over the trade issues.,” he said.
The National Farmers Union, an advocacy group, expressed its concern about the issue in a statement:
“While Farmers Union appreciates President Trump’s stated intent to fix these problems, his tactics to this point have insulted and alienated our closest trading partners. Instead of focusing on specific countries who are dumping or otherwise violating trade rules, the administration is proposing to sanction the entire world, which adds more volatility to already disturbed trading relationships."
Other industry group leaders say it remains to be seen what impact the tariffs will have on agriculture.
Joel Nelsen, president of California Citrus Mutual in Exeter, said he doesn't anticipate California oranges, lemons and limes will be squeezed by higher tariffs as a result of Trump's plan.
California's biggest citrus export markets are Korea, Canada, China, Japan and Australia.
Nelsen said he is more concerned about getting the Trans-Pacific Partnership, or TPP, trade agreement back on track. Trump pulled out of the 12-country deal in order to renegotiate more favorable term for U.S. businesses.
Nelsen said under the TPP, Japan, the fourth-largest market for California citrus, was going to phase out its current 30 percent tariff on American citrus.
The American Farm Bureau estimated that California farmers of fruits and nuts could have reaped $562 million in sales through lower tariffs and the elimination of tariffs.
"We would really like to rejoin that effort on TPP," Nelsen said.