“Trade War Threatens California Agriculture: Potential $6 Billion in Annual Losses”
As President-elect Donald Trump vows to impose tariffs on imports from China, Mexico, and Canada, economists are warning of potential major financial damage for California’s agriculture industry. An analysis published before the presidential election by researchers from UC Davis and North Dakota State University examined potential scenarios of tariffs and retaliatory measures. They estimated that if a significant trade war occurs, California could see the value of its agricultural exports reduced by up to one-fourth, resulting in as much as $6 billion in losses annually.
The researchers identified some of the most vulnerable commodities, including pistachios, dairy products, wine, and almonds, all of which are exported in large quantities to China. Sandro Steinbach, director of North Dakota State University’s Center for Agricultural Policy and Trade Studies, emphasized the harmful impact of tariffs on U.S. agriculture, particularly in California, as they could invite retaliatory measures from other countries.
The study analyzed three potential scenarios of U.S. tariffs, two based on proposals from Trump and his campaign. If the Trump administration were to impose large tariffs under the most extreme scenario, the researchers warned that retaliatory measures by other countries could have a ripple effect across California, affecting industries from almond orchards in the Central Valley to family vineyards in wine country.
The researchers highlighted the financial losses experienced by California farmers during Trump’s first administration when U.S. tariffs in 2018 prompted China to retaliate with tariffs on American agricultural goods. While farmers in the Midwest received federal subsidies to offset losses, California farmers were largely left out of government compensation.
Looking ahead, the researchers cautioned that if aggressive protectionist policies are enacted, California’s agricultural exports could face similar consequences, potentially leading to up to $6 billion in annual losses, especially in key industries like pistachios, dairy, and wine. They emphasized the need for balanced trade agreements to protect domestic industries without sparking harmful trade wars.
The potential impact of tariffs on California’s agriculture industry extends beyond immediate losses. The disruption could have lasting effects as foreign competitors gain market share and uncertainty discourages investment in California agriculture. The Central Valley and Southern California are identified as particularly vulnerable regions, with five counties projected to bear the brunt of the losses.
Governor Gavin Newsom has strongly criticized Trump’s tariff plans, warning of the disproportionate impact on California farmers and ranchers. Newsom highlighted the potential consequences for food prices, inflation, and the agricultural workforce, particularly in light of mass deportations of undocumented immigrants.
In response, Trump’s transition team defended the president-elect’s policies, emphasizing the benefits for American manufacturers and workers. The California Farm Bureau urged fair trade practices and policies that strengthen the agricultural sector’s viability and sustainability.
Amidst the uncertainty, almond growers, who have already faced challenges due to price declines and previous retaliatory tariffs, are cautiously optimistic about the market’s rebound. While concerns remain about the potential impact of tariffs, growers are prepared to adapt to changes and navigate the challenges ahead. The almond industry continues to advocate for reducing trade barriers and closely monitors developments in agriculture and trade policy under the new administration.