California farmers could fall to tariffs, costing the state's economy

WASHINGTON - California is golden no more when it comes to China, which is buying fewer agricultural imports from Golden State farmers. So, what's on China's hit list and how is it replacing it at America's expense? 

In January 2018, during President Trump's first term, the U.S. imposed tariffs and trade barriers on China to force an end to what he called long-standing unfair trade practices and intellectual property theft. 

Mike Jacob is president of the Pacific Merchant Shipping Association. 

"What tariffs do is they lower demand and increase prices because they're a consumer tax," Jacob said.

China's tariffs against U.S. agricultural products make them more expensive to Chinese buyers, choking off demand and canceling orders. 

"You see declines in U.S. exports in some of these things and some of these things are more volatile exports in dairy products and so forth," said UC Davis Economist Professor Kadee Russ.

China is now shifting to other suppliers in other countries, including Brazil and Argentina. 

"It's easy to lose a trading partner when the economies don't work and you have a ready alternative," Jacob said. "And, you see countries starting to put more resources into other commodities that U.S. might have had a lock on before."

Agriculture hit hard

Dig deeper:

The U.S. agricultural sector has been hard hit. Soybeans, meats, almonds, walnuts, pistachios, milk, table grapes, citrus, strawberries, tomatoes, wine, even oranges exported to China in great numbers for Chinese New Years. 

"It's a real hand-wringing time, I think, for agricultural producers, especially in California. When there is uncertainty, it can be particularly difficult for farmers," Professor Russ said.

It's also highly problematic to consumers. 

"Right now it looks like these costs are passed on to American firms and families," said Russ.

The Port of Oakland has been ranked first among all U.S. ports in shipping refrigerator containers for seven years in a row. They carry as much as $8 billion worth of goods.

That's as much as 37% to 45% of all the Port of Oakland exports. 

"We've seen some of the best months we've ever seen and some of the worst months we've ever seen all in the span of a short amount of time," said Jacob.

Colin Carter, a professor emeritus at UC Davis wrote last year that if a significant new trade war develops, California could see a quarter of its agricultural exports wiped out, costing the state's economy $6 billion annually.