Growers and shippers are expressing grave concerns over the U.S. President Donald Trump's tariffs of 25 percent on goods shipping into the U.S. from Mexico and Canada which were announced on Saturday but put on pause yesterday for 30 days.
"The growers and consumers–both ends of the supply chain–are going to get hammered with these tariffs," says Alex Zenebisis of Eagle Export, Inc./Alcaro Farms based in Quebec. "If the market is down, Canadian growers are going to have to accept to sell for 25 percent cheaper to get into the market. American growers too because there are the same tariffs on both sides." (Saturday evening, Canadian Prime Minister Justin Trudeau announced a number of retaliatory tariffs which include orange juice, berries, melons, and more--those are also now on hold.)
"These unfair and punitive tariffs will have a negative impact on Prince Edward Island potato farms and farm businesses and will raise the cost of food for our American neighbors," said the Prince Edward Island Potato Board in a statement. Over 40 percent of fresh PEI potatoes are normally shipped to the United States, and the majority of French fries made with PEI potatoes are also destined for the US. About 50 percent of the Island's total crop is grown ends up in US markets. "A prolonged trade battle will only serve to damage our industry, which provides nutritious food to both Canadians and Americans while driving up the price of food for Americans," notes the board.
Adding to costs?
The move, say growers, will destroy existing partnerships and increase strain and stress on growers and shippers. "There are so many growers intertwined within the three countries. They own land in Mexico, Canada, and the United States and they have offices in all three countries. None of this has made it a better life for anyone involved–for consumers, growers, people in the middle of the chain," Zenebisis says, noting again, consumers will feel the impact of these tariffs. "If you have someone with land in all three countries, they're just going to take their average costs of operations and adjust their price across the board for product coming out of all three countries. We're supposed to be progressing and we're going backwards. It's not going backward to go forwards."
"I wasn't surprised it was postponed because it wasn't clear–we had customs that didn't know how it was going to be implemented and enforced or what the plan was," says Steven Leal with S&J Distributing, who imports limes from Mexico. (It's estimated that over 90 percent of the limes in the U.S. are from Mexico.) "To put that tariff on every product from Mexico, the scope of that was gargantuan and to try and implement that in a few days just didn't seem feasible."
Difficult for all sides
Leal feels similar to Canadian importers about the tariffs. "There's no way to sugarcoat it. It's just a net negative for Mexico and the United States," says Leal.
He also notes that in the lime category, who may benefit from such tariffs are countries such as Colombia, Guatemala, and Peru which also ship limes at lesser volumes to largely the Eastern part of the U.S. Subsequently, he also believes those countries could start shipping more limes to the U.S. "It'd be different if the U.S. was a major player in growing and producing its own limes but it isn't," Leal said.
For more information:
Alex Zenebisis
Eagle Export, Inc./Alcaro Farms
www.eaglexport.ca
Prince Edward Island Potato Board
http://www.peipotato.org/
Steve Leal
S&J Distributing
https://www.snjdistributing.com/