India Poised To Kick America In The Actual Nuts With Tariffs On Almonds – And Also Apples

India Poised To Kick America In The Actual Nuts With Tariffs On Almonds – And Also Apples

On Friday, May 31, just hours after threatening to slap Mexico with across-the-board tariffs if the country didn’t figure out a way to stop the flow of illegal immigrants into the US within (laughs) 10 days, the Trump administration fired a shot at India.

This flew under the radar, or at least it did for some folks, but it was important. Trump scrapped GSP status for India, a move he tipped in March, but apparently held off on in order to avoid accidentally tripping up Modi ahead of the country’s elections.

The move affects some 2,000 products. In 2017, GSP status spared around $5.7 billion in Indian imports from duties and Trump’s decision also means India is now subject to the washing machine tariffs, the opening salvo in the now 17-month-old trade war.

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Fast forward exactly two weeks and India is prepared to hit back with tariffs on US goods including almonds, walnuts and apples next week, sources told Reuters.

The US, apparently, believes any such duties would be “inappropriate” under WTO rules – that would be the same WTO that Trump enjoys deriding as hopelessly ineffective.

“India initially issued an order in June last year to raise import taxes as high as 120% on a slew of US items, incensed by Washington’s refusal to exempt New Delhi from higher steel and aluminum tariffs”, Reuters reminds you. India decided to hold fire pending trade talks with Trump, but now that New Delhi’s GSP status has been revoked, all bets are off.

Here’s the Economic Times with what might as well be the official word:

India has decided to impose retaliatory tariffs on 29 American goods June 16 onwards, after having deferred the higher duties multiple times after announcing them last year in June, sources said.

Higher duties have been proposed on US walnuts, chickpeas, lentils, boric acid and diagnostic reagents, among other goods, imposing an additional burden of $290 million on them. The increased levies, first proposed in June 2018 after the US announced higher tariffs on Indian steel and aluminum, had been deferred six times in view of the trade dialogue between the two countries. 

“There will be no further extension of the retaliatory tariffs”, said an official.

This doesn’t sound like it’s going to be a positive development for almond and apple growers.

Reuters goes on to emphasize (for the umpteenth time in the past year) that “India is by far the largest buyer of US almonds, paying $543 million for more than half of US almond exports in 2018 [and] it’s the second largest buyer of US apples, taking $156 million worth in 2018.”

This came up last summer and growers weren’t happy about it. “If India happens… almost half of all our apples that we export will be impacted in one way or another with a duty”, Todd Fryhover, president of the Washington Apple Commission said a year ago. “That’s very concerning. There’s absolutely no question about that.”

Around the same time, Richard Waycott, president and CEO of the Almond Board of California, noted that “generally speaking, the tariff situation and how it’s evolved has created market uncertainty [and] markets don’t like uncertainty.”

No, they don’t, Richard.

But the Trump administration believes that the more uncertainty there is, the stronger America’s hand in trade negotiations – apple and almond farmers be damned.


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