These Farmers Love Trump’s Trade War

October 12, 2018 10:28 AM
 
The ongoing U.S.-China trade war could provide the opportunity one group of American farmers needs to compete with cheaper Chinese imports.

While the trade war between China and the U.S. has created significant impacts on prices and profitability for many American farmers, one group sees the dispute as the opportunity they need to revitalize their businesses – garlic growers.

China has an iron-grip on the U.S. market for garlic, controlling more than 90% of the dried garlic sold in America, a fact that has choked many U.S. garlic farmers out of business over the last quarter-century. American growers believe Trump’s new 10% tariff could help bolster their operations.

There is a "garlic war that has crowded out U.S. farmers," Eric Block, a University at Albany professor who has studied garlic for more than 30 years told AXIOS.com. Pricing pressure from cheaper Chinese garlic has caused a lot of of U.S. farms to scale back production, or shut down completely.

Data reported by USDA reveals China’s dominance of the world garlic trade. In 2016, world production of garlic was 26.6 million metric tons, 80% of which was produced in China. India was the second largest producer with 5% of the total. The United States – ranked 10th in global production of garlic – grows less than 1% of China's production. The U.S. is the world’s largest garlic importer, buying more than $300 million in dried and fresh or chilled garlic in 2017.

But garlic prices underscore China’s advantage. In San Francisco, the current price of a 30-pound carton of Chinese-grown white garlic is $38 to $40, according to USDA, compared to $68 for U.S.-grown garlic.

Ken Christopher, who runs Christopher Ranch, the largest U.S. garlic producer in Gilroy, California, told AXIOS that even though the tariff will not equal out the prices, the penalty will make it less profitable for Chinese growers and "it will make an impact, when you're dealing in millions of pounds of garlic."

Trump's tariffs will "change the entire game for garlic farmers," he says, because the tariff will be collected in advance, confounding the past "duty evasion schemes."

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