According to American Pistachio Growers (APG), tit for tat tariffs between the United States and the European Union (EU) are looming due to the latest escalation of the dispute over government aid given to Boeing and European rival Airbus following a decision by the World Trade Organization (WTO).
A preliminary list prepared by the United States Trade Representative (USTR) includes products from the United States that could be subject to additional tariffs. The list includes $11.2 billion worth of EU products to tariff until the EU ends its subsidies.
The draft list includes fresh or dried pistachios, along with shelled and roasted almonds and pistachios.
As APG interprets the list, raw in-shell pistachios will not have a tariff increase. Raw, in-shell pistachios represent approximately 97 percent of all pistachio shipments to the EU.
The EU must submit its list of products and the amount of tariffs to the WTO arbitration body for approval before enforcing them. The timeline of adoption is, for now, uncertain, given the crisis of the WTO arbitration body and the fact that the EU would prefer to solve this issue through bilateral negotiations with the U.S. If implemented, the tariffs would likely be implemented in June or July of 2019.
According to American Farm Bureau Market Intel, the United States is the world’s largest exporter of pistachio nuts, selling $1.4 billion of in-shell pistachios in 2017. Only $1.8 million worth of pistachios were imported to the United States that same year, maintaining a trade surplus. The United States charges a zero percent tariff on in-shell pistachios for all free trade agreement partners. Non-FTA (Free Trade Agreement) partners are charged a 5.5 cent per kilogram tariff.
The European Union is the second largest customer of U.S. pistachios, purchasing $446 million of in-shell pistachios in 2017. U.S. pistachio exporters have been charged a 1.6 percent tariff.
In 2017, Iran produced $899 million worth of pistachios, making them the second-largest producer of pistachios in the world. As our largest competitor in the pistachio market, Iran exported $179 million worth of in-shell pistachios to Vietnam, their largest customer, in 2017. The second-largest customer for Iranian in-shell pistachios is Hong Kong, purchasing $147 million in 2017.
Earlier this year, American Pistachio Growers secured more than $2.8 million in funds from the United States Department of Agriculture (USDA) to expand international trade, confront unjustified trade retaliation and enhance nutrition research.
American Pistachio Growers also secured $911,108 under USDA’s Market Access Program (MAP), completing a funding trifecta. On January 31st, APG was awarded $1.715 million in Agricultural Trade Promotion (ATP) Program funds, and it was also the beneficiary of $248,158 in Specialty Crop Block Grant funding.