A simmering trade dispute between Mexico and the U.S. has triggered a new round of tariffs for California farmers.
Mexico has added oranges, apples and grapefruit to a list of 99 items it has slapped with tariffs ranging from 5% to 25%.
The retaliatory tariffs are in response to the U.S. government's refusal to continue a pilot program allowing Mexican trucks on American highways. A California grape industry leader said that while the tariffs will hurt farmers, the move was not unexpected.
"They are following through on what they said they would do if the U.S. did not make a serious attempt to resolve this in a timely manner," said Barry Bedwell, president of the Fresno-based California Grape and Tree Fruit League.
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The good news for grape growers is that their tariff was dropped from 45% last year to 20% this year.
"That is a good thing and maybe we can rebuild those markets," Bedwell said. At least 40% of California's table grapes are exported, with Mexico ranking as the No. 2 importer of California table grapes, behind Canada.
In 2008, California's grape exports to Mexico were valued at nearly $60 million. That figure collapsed to $18.7 million after the tariffs took effect.
Overall, Mexico ranks as the fifth leading export market for California farm products.
Joel Nelsen, president of Exeter-based California Citrus Mutual, said that fortunately for Valley growers, Mexico is not a large export destination for Valley oranges. In 2007, Mexico imported $8 million in oranges.
"It is not going to hurt us," Nelsen said.
But what does concern Nelsen is the potential the trade tiff may have on the partnerships between the citrus industry and Mexican agriculture officials over fighting the Asian citrus psyllid, a harmful citrus pest.
"There has been a lot of cooperation going on between the two countries," Nelsen said. "And we want that to continue."
The 18-month trucking program ended last March amid concerns from some members of Congress and the Teamsters Union about the safety of the Mexican trucks.
But Mexican officials denied safety was an issue.
"It was driven by protectionism, the costs of which were borne by businesses, workers and consumers in our two nations," according to a statement from the Mexican government.