The farmers and food manufacturers in California fear their businesses will be hurt from both directions -- China's new tariffs and the U.S. tariffs on Chinese aluminum and steel.
The trade dispute between China and the United States, the world's two largest economies, will not only hurt the state's agricultural exports but also affect the materials needed in farming and food manufacturing, said industry insiders.
Some vintners are worried that the prices of steel stakes, wires, anchors and tin posts used in vineyards will be pushed up as the Donald Trump administration proposed a 25 percent tariff on Chinese steel imports.
Food manufacturing will be hurt as well because most of the tinplate steel used in the U.S. cans is imported, largely from China since it's less expensive and of better quality, according to Rob Neenan, president and CEO of the California League of Food Processors.
Some 24 billion cans are used annually in the U.S. food processing, and the new 25 percent tariff on tinplate steel imports from China, plus those by other countries, would increase costs by about 5 billion U.S. dollars, he said in an article posted by California Farm Bureau Federation on Tuesday.
He said the consumers will end up paying the increased cost and it will leave the U.S. industry less competitive in the marketplace.
California is the top impacted state in the United States by China's 15 percent - 25 percent added tariffs on U.S. agricultural products, according to a recent report by Farmers for Free Trade.
The tariffs went into effect on April 2 in response to the U.S. proposed tariffs on China's aluminum and steel. Some vintners have been impacted by initial fallout as Chinese importers canceled or put on hold orders.
Exports not only support the state's farms but also other sectors, said California Farm Bureau Federation President Jamie Johansson.
He used the North American Free Trade Agreement as an example to explain what exports meant to California -- the U.S. fresh fruit and vegetable exports to Canada and Mexico have more than tripled since the agreement took effect in 1993.
Reduced exports will also cost domestic jobs, a new study finds.
The proposed tariffs on Chinese imports would reduce U.S. gross domestic product by 2.9 billion dollars and cost almost 134,000 U.S. jobs, including more than 67,000 jobs in agriculture, according to a study commissioned by the Consumer Technology Association and the National Retail Federation.