How China’s US tariff jab choked a cherry import boom | The Daily Star
12:00 AM, July 23, 2019 / LAST MODIFIED: 01:30 AM, July 23, 2019

How China’s US tariff jab choked a cherry import boom

For public relations officer Rachel Li, paying top dollar for “beautiful” cherries imported from the United States was a no-brainer.

“I heard they are full of iron,” said the Guangzhou-based 33-year-old, “eating them makes me feel healthy, luxurious.” Or it did, until Beijing imposed sky-high tariffs on US cherries and importers took fright, leaving store shelves bereft and consumers like Li needing a different fruit fix.

Across China’s metropolises, the appetite of a burgeoning middle class for expensively fresh US cherries has become a symbolic casualty of China’s festering, tit-for-tat trade battle with the United States. A business that grew to nearly $200 million in 2017 from zero in 2000 has now withered to little more than a tenth of its volume peak, customs data shows.

With import tariffs for US cherries set at 50%, Beijing has relaxed regulations allowing imports from Central Asia - a region that just happens to be central to President Xi Jinping’s epic ‘Belt and Road’ infrastructure project, an intercontinental initiative worth hundreds of billions of dollars.

“It’s an opportune time for China to fiddle with the knobs and to do so in a way that builds economic ties and offers a new market for ‘Belt and Road’ partners,” said Even Pay, senior agriculture analyst at Beijing-based advisory firm China Policy. China’s Ministry of Commerce didn’t immediately respond to a fax requesting comment.

May was the last month for which figures were available at the time of writing, typically the first big month in China’s cherry import season. Supplies from Uzbekistan leapt to nearly half of the May total, Reuters’ calculations show, from zero a year earlier, while the US share of the cherry import pie shrank to 38% from nearly 80% in May 2018 - and a near monopoly in May 2017.

But total cherry imports into China by volume have plummeted because of the collapse of US shipments: 187 tonnes in May 2019, versus 337 tonnes in May 2018 and 1,505 tonnes in May 2017.

Uzbek cherries sell at about 70-80 yuan per kilogram (kg) at retail level, according to four fruit traders, no more than half the 160 yuan ($23.28) per kg that Rachel Li said she happily remembers stumping up for her sweet US cherries.

No matter the price, though, the volumes now being shipped in are so small that Li said she hasn’t seen imported cherries for weeks. A search by Reuters for US cherries at a supermarket and smaller groceries in downtown Shanghai on a recent weekday came up empty-handed.

For Victor Wang, the China representative of US Northwest Cherry Growers, it’s now a case of trying keep head above water.

Wang said it took 17 years of marketing and government lobbying to help make US cherries some of the most coveted fruits in China - at one stage his suppliers were even exporting more to China than across the border to Canada. But that all changed in 2018, when two rounds of Chinese tariff hikes added 40 percentage points to import charges.

“With such exorbitant costs after the tariff hikes, and impact of a strengthening dollar, it’s impossible to develop the market - we are at best maintaining it for now,” said Wang.

Making life harder, Wang said, is the fact that the association has also struggled to advertise the US fruit this year.

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