In China, pistachios are known as the “happy nut” because they look like they’re smiling. But President Trump’s trade brawl with China is turning out to be a huge downer for America’s pistachio farmers who now stand to lose business to Iran. What was that about national security, Mr. President?
After President Trump slapped tariffs on steel and aluminum and later escalated by targeting $50 billion in Chinese products, Beijing retaliated. China’s tariffs on U.S. pistachios this year have increased to 45% from 5%. China targeted pistachios to inflict pain in a region where Republicans are politically vulnerable. About 99% of American pistachios are grown in California’s San Joaquin Valley, home of GOP Reps.
These areas have already been stricken by the state’s draconian restrictions on pumping water from the Sacramento-San Joaquin River Delta. As water prices soared over the last decade, many farmers shifted from growing alfalfa and other low-value crops to nuts. While nut orchards require a lot of water, they fetch a high price thanks to soaring global demand, especially from China.
More than half of pistachios produced in the U.S. are shipped abroad, and China and Hong Kong buy half the exports. Over the last dozen or so years, California’s pistachio shipments to China have increased 1,300%.
The U.S. was the world’s top pistachio exporter last year (217,559 metric tons), but Iran was not far behind (144,300). No other country exports a significant amount, so Iran is poised to supplant California pistachio farmers in China. It’s worth recalling that Mr. Trump justified his steel and aluminum tariffs in the name of national security, yet they’ve triggered retaliation that is now abetting an enemy.
Meantime, the California State Water Resources Control Board this month proposed further slashing water deliveries to farmers to protect fish. This will drive up water prices further and with the tariffs make it even harder for nut farmers to turn a profit.
Farmers in California have long complained about liberals in Sacramento, but now they may have just as much to fear from the Trump Administration.
Appeared in the July 17, 2018, print edition.