US tariffs: what are the possible scenarios for fresh produce?

According to the International Fresh Produce Association (IFPA) who organized a webinar on US tariffs last April 4th, many countries will try to engage in pragmatic negotiations with the Whitehouse. Examples are Argentina, Vietnam, others like Zimbabwe already announced they will cancel their tariffs on US imported goods. On the other hand the major trading nations or blocks such as China and EU have or will retaliate, also foster trade between themselves. There will be a shifting supply chain as the EU and China will take more products from the rest of the world. As examples, China will buy more grains from Argentina and Brazil. Maybe these trends will be precursors of changes in the sourcing of specialty crops as well, like fresh fruit and vegetables. However, it is difficult to reconfigure the supply chains for specialty crops in the short term, maybe one season from now.

Objectives: reduction of the abysmal US government depth and restauration of the domestic industry

Large and persistent annual U.S. goods trade deficits have led to the hollowing out of the US manufacturing base. It resulted in a lack of incentive to increase advanced domestic manufacturing capacity. It also undermined critical supply chains and rendered US defense-industrial base dependent on foreign adversaries. President Trump invoked his authority under the International Emergency Economic Powers Act of 1977 (IEEPA) to address the national emergency posed by the large and persistent trade deficit that is driven by the absence of reciprocity in the trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries. Using his IEEPA authority, President Trump decided to impose a 10% tariff on all countries. This just took effect since April 5 at noon Eastern time (EST). President Trump will also impose an individualized reciprocal higher tariff on the countries with which the United States has the largest trade deficits and/or with countries which are applying a high import tariff on US goods. All other countries will continue to be subject to the original 10% tariff baseline. This will take effect April 9, 2025.

Mexican produce can be delivered to Canada without US tariff

Loads can be imported by local importers with address in US commercial zone under an Immediate Delivery (ID) entry. This allows the importer to re-export the product under T&E to a foreign country (Canada) and minimize or eliminate the payment of duties; importers should expect additional handling fees from U.S. customs brokers. It must be done within 10 days, but realistically 8 days is more of a workable time for brokers. It’s important to know that ID imports will not apply to all importers, but clarification and guidance is still needed from the US Customs and Border Protection authorities (CBP) for proper application. Otherwise, the shipments can go in-bond under a T&E directly from the import lot; under this condition an Intransit Permit we would required from USDA-PPQ for the commodities; including low risk fruit fly commodities and other restricted and prohibited commodities.

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