The last time Mexico put an extra 20 percent duty on American apples because of a trade dispute, it cost Washington growers $44 million.
On Tuesday, Mexico announced a 20 percent tariff on U.S. apples in response to the Trump administration’s tariffs on steel and aluminum. Whether that will have the same impact depends on how long the tariffs last, representatives of the apple industry said.
Mexico is the state’s top foreign market for apples, and growers “still have a good deal of fruit left to sell” from the 2017 crop, said Mark Powers of the Northwest Horticultural Council.
The tariffs won’t close the Mexican market to those apples or, if they remain in effect, to the 2018 crop, which will be harvested beginning in August, Powers said. But growers will look for other export markets to make up for lost sales to Mexico.
“Whatever kind of opportunity is out there remains to be seen,” Powers said.
India, another foreign market with opportunities for expansion, is considering a 30 percent tariff.
Consumers and producers likely will share the impact of the tariffs, said Todd Fryhover of the Washington Apple Commission. But how it will be split between higher costs in the store and lower prices to growers is unclear.
The best yardstick is the 20 percent duty Mexico imposed on U.S. apples from August 2010 to October 2011, Fryhover said. That caused sales to drop and wound up costing growers an estimated $44 million.
It’s too soon to tell how big the 2018 crop will be, but if it’s average size and the tariffs last for a year, the impact could be about the same, Powers said.
The bulk of Washington apples are grown for the fresh market and can be shipped from special storage up to 13 months after they are picked. A small amount could be diverted to processing for juice and other products, and some leftover apples could be fed to livestock.
“I don’t think dumping fruit would be an option,” Fryhover said.