California-based U.S. Sen. Dianne Feinstein has come out publicly in chastising President Donald Trump for the degrading trade ties with India that has directly affected California almond growers.
Feinstein says that Trump’s actions are hurting the state’s almond growers, who export more than $650 million worth of nuts to the country every year.
The veteran senator’s criticism of the president came days after India announced a hike in customs duties on as many as 28 U.S. products, including almonds, pulses and walnuts, in response to higher tariffs imposed by Washington on Indian products like steel and aluminum, according to a Press Trust of India report.
"India just placed a 75 percent tariff on almonds in response to President Trump's trade war. His actions are hurting Californians,” Feinstein said in a statement. “California almond exports to India are worth more than $650 million a year. The president must stop damaging trade relations with our allies.”
Almond growers in the U.S. are worried as authorities last month predicted a record California almond crop for the upcoming production year. According to the Almond Alliance of California, its almond export is being badly hit by retaliatory tariffs from both China and India.
California almond orchards are expected to produce 2.50 billion pounds of nuts this year, up 8.69 percent from last year's 2.30 billion-pound crop, it said, according to the report.
The Indian move is also seen in retaliation to Trump's decision terminating India's designation as a beneficiary developing nation under the key GSP trade program after determining that it has not assured the U.S. that it will provide "equitable and reasonable access to its markets," the report said.
The suspension became effective June 5. India's retaliatory tariffs came into effect June 16.
Apples and almonds are some of the other American agricultural products to be impacted by India's retaliatory tariffs, the PTI report added.
The move will hurt American exporters of these 28 items as they will have to pay higher duties, making those items costlier in the Indian market.
Earlier, the list included 29 goods but India has removed artemia, a kind of shrimp, from the list.
The country would get about $217 million additional revenue from such imports, the report added.
America had in March last year imposed a 25 percent tariff on steel and a 10 percent import duty on aluminum products. Earlier, there was no duty on these goods, it said.
India's exports to the U.S. in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The trade balance is in favor of India, the report said.
The tariff on in-shell almonds will go from 23 to 27 cents per pound, according to a Modesto Bee report.
The walnuts tariff will rise to 120 percent of the U.S. product price, up from the 100 percent that India levies on these nuts from all sources, it said.
India has emerged as a top buyer thanks to a growing middle class that sees the health benefits of eating almonds, according to the Bee report.
India’s latest action applies to products from the U.S. that includes pears, chickpeas, lentils and certain chemical and steel items.
The state’s walnut industry was slower than almonds to build the India market, but it has come on strong in recent years even with the 100 percent tariff, the Bee said.
Associated Press reporter Samantha Maldonado adds from Modesto, Calif.:
Along large swaths of California’s lush central valley, almonds in the fuzzy hulls of tree leaves blow in the wind on thousands of acres of orchards. Thousands of miles away in India, customers browse the nut sections of busy street markets and grocery stores in search of the best almonds to use in curry dishes, health drinks, ice cream and many other recipes.
Now the future of that market is uncertain. India this month imposed tariffs on almonds and 27 other American products, including apples and walnuts, in retaliation for the U.S. ending India’s preferential trade status. Those tariffs took effect June 16 and come on top of a significant tariffs China placed on almonds last year.
“We can deal with market disruption in one country, but to have it in multiple countries is a real challenge,” said David Phippen, a partner of Travaille & Phippen, Inc., a farm and processing company in Manteca.
California supplies 82% of the world’s almonds and has almost 7,000 growers. The Almond Board of California estimates the industry generates about 104,000 jobs in California, and the effect of the tariffs might ripple outward. India is such an important market that the almond board, whose members engage in market research and promotion overseas, has an office in New Delhi with a $6 million annual advertising budget.
The tariffs add about 12 cents per pound to shelled almonds, a 20 percent increase, and about 4 cents for those still in their shells, a rise of 17%.
Bhupesh Gupta, a grocery store owner in New Delhi, believes higher prices will cut into sales. While India is one of the world’s largest consumer markets, it also has huge income disparities and hundreds of millions live in poverty. Even a small increase in the cost could have a large ripple effect on what people buy.
Still, other sellers say that Indians are so passionate about almonds that they will figure out a way to deal with price hikes.
“It won’t matter, as anyone who needs almonds will buy no matter what the price,” said Delhi grocer Virender Kaneja.
For California farmers, most immediately the tariffs mean planning difficulties as the harvest season approaches. For example, some may need to take on more of the shipping costs to make up for the increased prices, which will be negotiated in the contracts. The handlers then may absorb the increased costs themselves or pass them onto the growers.
To cope, growers may cut down on spending on equipment and fertilizer, perhaps making the choice to forego replacing a tractor. If the Indian tariffs slow the flow of inventory, as happened after the Chinese tariffs, the capacity of storage facilities may be stretched.
U.S. Secretary of State Mike Pompeo was in India this week, meeting with officials amid growing tensions between the two countries over trade and tariffs. A California congressman has asked Pompeo to raise the almond tariff issue.
Some growers worry that if California almonds get too expensive, buyers will look elsewhere.
(Associated Press writers Emily Schmall and Ashok Sharma in New Delhi contributed to this report.)