Exporting Nuts in a Time of Tariffs
By Jock O’Connell
Tree nuts continue to account for substantial shares of the containerized export trades at USWC ports, most notably those in California. Last year, tree nut crops accounted for 7.3% of the $81.590 billion in containerized exports from America’s Pacific Coast ports. Only shipments overseas of Beef held a higher share, outdistancing Motor Vehicles, Pork, and Copper Waste & Scrap, as Exhibit 8 reveals.
Unfortunately, almonds, walnuts, and pistachios have become regular targets for retaliatory tariffs imposed by countries whose products have been hit by higher U.S. import tariffs. That is not good news for an industry with an exaggerated dependence on foreign markets. Domestic markets in the U.S. account for minority shares of tree nut sales and are unlikely to absorb more than a small portion of the declining export volumes.
Overall, a new trade war could cost $6 billion and wipe out one-quarter of California’s agricultural exports, according to Colin Carter, professor emeritus of agricultural economics at the University of California at Davis.
During his first term in office, President Trump imposed tariffs on imported steel and aluminum, which were being largely sourced from China, Canada, Mexico, and the European Union. Not unexpectedly, retaliatory tariffs soon ensued against U.S. products, including tree nuts. Those proved costly. For example, a 2022 study from the University of California at Davis concluded that retaliatory tariffs cost the U.S. almond industry almost $875 million in exports or more than 325 million pounds of shipments between April 2018 and April 2022.
Almonds are California’s top agricultural export in value. So far in the current Crop Year (August 1 through February 28), exports have accounted for 71.8% of all almond shipments to customers here and abroad. However, exports of almonds have been off 0.6% from a year earlier. Shipments to our North American trading partners, Canada and Mexico, have remained up, nudging up 3.8% over the same period in the last crop year. However, exports to China/Hong Kong have plunged, falling 46.6% year-over-year. Shipments to Europe have meanwhile been down 0.8%.
Walnut growers start their crop year on September 1. Through February, exports of inshell walnuts have plunged by 50.8% to 117,463,250 pounds from 238,579,251 pounds. Exports of walnut kernels were also down year-over-year by 9.2%, slipping to 158,746,356 pounds from 174,748,841 pounds. While shipments of inshell almonds to Europe have declined by 11.4% to 50,978,984 pounds from 57,548,880 pounds, exports to the Middle East slumped by 79.1%, falling to 31,522,788 pounds from 150,903,564 pounds at this point in the previous crop year.
The crop year for pistachios also starts on September 1. Pistachio exports account for 77.4% of all pistachio shipments in the current crop year through February. However, exports declined by 29.8% YTD. Shipments to Canada and Mexico have fallen by 14.0% to 3,088,023 pounds from 3,592,247 pounds. Exports to Europe have edged up by 2.0% to 29,521,249 pounds from 28,941,141 pounds. Shipments to Asia dropped precipitously to 12,903,016 pounds from 31,462,234 pounds in the previous crop year. Pistachio exports to the Middle East and Africa have also been down, slipping to 6,305,593 pounds from 13,328,796 pounds.