US Trade Representative calls for an investigation on strawberry imports

Published 2020년 11월 25일

The US Trade Representative (USTR) is requesting an investigation into imports of strawberries, weeks after a similar investigation was announced for blueberry imports. The US is importing strawberries mostly from Mexico.

In an Election Day letter to the chair of the US International Trade Commission (ITC), Robert Lighthizer officially asked the body to "monitor and investigate imports of strawberries." Such an investigation could lead to market barriers such as tariffs. The investigation comes after growers, particularly in Florida and Georgia, legislators, and industry reported to the USDA that imports are limiting domestic market access and pricing for their crops.

Source: Tridge Trade Data

It is no surprise to speculate that the trade barrier - if imposed - must be targeting Mexico, as the country accounts for 99% of the US strawberry imports. In 2019, Mexico accounted for approximately USD 0.86bn worth of fresh strawberries while the second-largest exporter to the US, Canada, only accounted for USD 0.008bn. The significance that Mexico exercises for strawberries to the US has increased over the last five years, with the export values of Mexican strawberries to the US increasing at a CAGR of 120% during 2015-2019. In fact, due to the increase of Mexico's strawberry exports, US farmers have requested the US government to limit imports of Mexican fresh fruit in October 2020. According to the farmers, the fruit arrives at very competitive prices at the time when they are starting their harvest, putting downward pressure on domestic wholesale prices and reducing their profitability. The US strawberry industry is feeding Americans US-grown produce mostly from November to late spring, and the wholesale price of strawberries in the US does fall dramatically during this period as the imports from Mexico increases due to the overlapping seasonality:

The wholesale price of strawberries in California

Source: Tridge Domestic Prices

Mexico mostly produces from January to late spring

Source: Tridge Seasonality Data

While some degree of opposition from Mexico is expected depending on the outcome of the investigation, it is not the first time that the US is taking an adversary position to the neighboring country in the agricultural sector. At the beginning of September, the Trump administration announced plans to help US farmers who it says are 'threatened' by rising imports of seasonal fruit and vegetables from Mexico. A month later, - and as mentioned in the September announcement - the USTR asked the ITC to initiate a Section 201 global safeguard investigation into the extent to which increased imports of blueberries - from all origins - have caused serious injury or threat thereof to domestic blueberry growers. That investigation could also result in tariffs, marketing orders, or import quotas.

Now the USTR is requesting the ITC monitor and investigates imports of strawberries, under section 322 of the Tariff Act of 1930. If the US takes action on this, it will encourage its trading partner to consider a similar option for other trade areas.

Source

Tridge, Insights