USDA Report Highlights Challenges and Opportunities in Maintaining Market Share in China’s Growing Agricultural Market
U.S. specialty crop exports to China have significantly declined over the past six years, primarily due to retaliatory tariffs, enhanced Chinese production capabilities, and new free trade agreements with other trading partners. This downturn is detailed in a recent report by the USDA.
Numerous U.S. specialty crops remain subjected to retaliatory Section 232 tariffs in addition to the most-favored-nation (MFN) tariffs. The report emphasizes the importance of targeted marketing campaigns to maintain U.S. market share for tree nuts and fresh fruit, which are still highly valued in China.
In 2018 and 2019, the U.S. imposed tariffs on Chinese goods, citing unfair trade practices, which led to China’s retaliatory tariffs on U.S. products. These tariffs have impacted billions of dollars worth of goods, many of which are still in place. Despite these challenges, China continues to be a top market for U.S. farmers, with agricultural export sales reaching $29.1 billion in 2023. Key exports include soybeans ($15.2 billion), corn ($1.7 billion), beef ($1.6 billion), cotton ($1.6 billion), pork and pork products ($1.2 billion), and coarse grains ($1.2 billion).
However, U.S. fresh fruit exports to China have experienced a dramatic drop in value, decreasing from $226 million in 2017 to $86 million in 2023. This decline spans multiple fruits, with grape exports falling from $22.2 million in 2017 to a mere $321,000 in 2023. Cherry exports also saw a significant decrease, plummeting 63% from $118.6 million in 2017 to $43.7 million in 2023. U.S. cherries are increasingly competing with higher quality cherries produced domestically in China.
The decline is not limited to cherries. U.S. orange exports to China decreased by 43%, down to $27.4 million between 2017 and 2023. U.S. oranges now compete with improved quality domestic varieties and imports from countries like South Africa, Egypt, and Australia.
Although the U.S. gained market access for blueberries, avocados, and nectarines through the Economic and Trade Agreement, these fruits have struggled to gain a foothold in the Chinese market due to price competitiveness issues with domestic and South American production.
Despite these declines, U.S. tree nut exports to China have shown remarkable growth, increasing from $243 million in 2017 to $1.2 billion in 2023, a 400% rise. The report indicates that while the overall size of China’s tree nut import market has grown, the U.S. market share has decreased. Nonetheless, demand for U.S. branded mixed nuts has seen substantial growth in recent years.
Conversely, U.S. exports of fresh and processed vegetables to China have been on a downward trend since the mid-2010s. For instance, frozen French fry exports to China fell from $78 million in 2017 to $18 million in 2023, partly due to increased domestic potato production for frozen processing in China.
