How Tariffs and a Trade War with China Could Affect CA Farmers
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From KQED in San Francisco, I'm Nina Kim. Coming up on Forum, Wall Street may have breathed a sigh of relief yesterday when President Trump announced a 90-day pause on the sweeping tariffs he unveiled last week. But there was little relief among California farmers, especially those who export crops like pistachios or almonds to China and other countries. Trump further raised taxes on Chinese imports to 145 percent. And more retaliatory tariffs from China are expected to follow.

We check in with an ag economist and with farmers on how they're weathering all the uncertainty. Join us. Welcome to Forum. I'm Nina Kim. California is the nation's biggest agricultural producer. And during Trump's first term, his trade war with China cost the state's farmers many hundreds of millions. Add to that, California received far less of the administration's bailout than Midwestern states.

So how are farmers facing potentially significant losses with Trump's new trade war, even with the president's announcement yesterday of a 90-day pause on most tariffs above 10%? And what can we expect to see when it comes to grocery prices? We take a closer look this hour with Colin Carter, Distinguished Professor of Agricultural and Resource Economics at UC Davis. Colin, welcome to Forum.

Well, thank you, Myna. Good morning. Glad to have you on. And Marsha Brown is with us, food and agriculture reporter covering federal agencies and the business of food for Politico. Marsha, really glad to have you as well. Thank you so much for having me on the show. So, Marsha, first, can you just break down yesterday's announcement from President Trump about tariffs and if it gave us any clarity about how things will move forward?

Yes, so I think yesterday could certainly be accurately described as chaotic. We certainly saw the markets zoom up a very straight line in response to the president's announcement, really just hours after he had first imposed his tariff agenda. And, you know, I want to say that a lot of the tariffs do remain in place. What he said

got rid of yesterday were these what he was calling reciprocal tariffs which were based on the country's trade deficit with um you know with the US and um we still have about a 10 tariff on pretty much every country right now which is about 10 times higher than it was before so that's still a significant increase and I and I don't want us to lose sight of that

And of course, one country was excluded from this relief, and that was China. And those tariffs, the White House has clarified today, are now 145% for Chinese imports. And China has hit the US with an 84% tariff. So we're still looking at a really rapidly

increasing tariff war with China right now, trade war, I should say. Yes, absolutely. And your point about the 10% tariffs not being something to ignore. Colin, I'm curious how these 10% tariffs will likely affect food prices and which foods? Right. So I think the 10% is even a low estimate. If we take a weighted average, because China is a big trading partner,

We still have the fentanyl tariffs on against Mexico and Canada. I calculate that the actual U.S. tariffs are now closer to 15 to 20 percent, which is the highest since the Great Depression. So we're still in a situation where we have a serious tariff issue that will have a significant impact on agriculture and food prices.

For instance, the top three export markets for California agriculture are Canada, European Union and China. China has large retaliatory tariffs. Canada has announced retaliatory tariffs. The EU has voted on them. They've just put a pause on them. So those will all come to bear back on California producers.

We have to break it down in the consumer side and the producer side. So on the producer side, situation is not good. We're entering a trade war with our major trade partners. On the consumer side, the tariffs that Marcia mentioned will have a big impact on imports of fruit, vegetables, seafood, coffee, olive oil. It's a long list. And basically, these tariffs are going to raise inflation.

And, yeah, you mentioned things like coffee. I think another one I saw was bananas and so forth. You know, a lot of the president's justification for tariffs is to encourage more of things being done, manufactured and grown in the U.S. But some of the things that you're talking about don't feel like things that we could easily start to grow here.

We need a lot of greenhouses. It's actually Mina, Colin. It's Mina. Yes. A lot of greenhouses, you know, if we plan to be self-sufficient in bananas and coffee. Yeah. And because there's a producer side to this, as you say, could some grocery prices actually fall because these will be products that are harder to export? So there'll be quite a lot of supply. Yeah.

Yes, there will be a lot of supply of certain products that are highly dependent on the foreign markets. For instance, if we're talking about California, tree nuts are highly dependent on world markets. California exports around 70% of its almond crop. It's the number one export by value.

If the almond exports are reduced, they will back up into the United States. We'll see higher inventories. There may be a slight decline in price. But as we discussed with rows and rows of greenhouses, I can't see us eating almonds for breakfast, lunch, and dinner.

So Colin Marshall was talking about how Trump tried to tamp down his tariffs on most countries yesterday, but really turned them up on China. I mean, we're at 145%. Can you just remind us specifically California's top ag exports to China? Yeah, the top ag exports to China are tree nuts and dairy. So if you take

And it's hard to discuss this, Mina, without going back to the previous Trump trade war. So prior to that previous Trump trade war, I'll just give you an example. China imported a lot of tree nuts, almonds, walnuts, pistachios from California. Over 90% of China's imports of tree nuts originated in California. That last trade war,

ruined that market to some extent. That share went from plus 90 to just over 50%. So we're starting at a lower base than what we ought to be starting from if it hadn't been for the previous trade war. But to answer your question, today the most important exports are pistachios, dairy products, and almonds. Those three groups account for about 60%

of California farm exports to China. So, Marcia, speaking of the last trade war, there was also a bailout that was given to farmers who were suffering as a result of them. Can you remind us what happened then? And specifically, if California reaped the benefits of that?

Sure, Amina. So the last trade war cost farmers a lot of money and the Trump administration did decide to bail out many of those farmers through a program called the Market Facilitation Program. The administration ultimately spent more than $20 billion on payments to farmers and

And those payments were based on, you know, how much that farmer exported the year prior. So kind of, you know, demonstrating, okay, this, this farmer was, you know, was able to export her crop. And so we're going to kind of try to, to plug the hole. Right. But unfortunately, first of all, the payments weren't enough, you know, a government payment doesn't necessarily, you know, fill that gap.

And the loss of that market has ripple effects across the economy that are not necessarily just, oh, this soybean farmer isn't able to export anymore. That soybean farmer maybe now is growing more corn or growing more wheat in the next decade.

season and then the prices for corn and for wheat fall. And those farmers don't get any kind of bailout or support from the government based on the trade deficit because they weren't necessarily part of that original package. And the same thing would be true if your input costs are going up, if you're paying more for fertilizer or for seeds and

the previous programs weren't really designed to address those issues as well. Yeah. And are you hearing that there will be a new bailout if the government moves forward aggressively with tariffs? Are you hearing that from the USDA, Marcia?

That's a great question. Brooke Rollins, the Agriculture Secretary, has telegraphed several times that they are in talks about a potential bailout. But there are a couple of complications with that. One is that the USDA fund that was previously used only has about $4 billion left in it. It does get replenished in October, but we're a long way from October.

And then the other problem with that is because those payments in the first programs were based on acres planted, farmers are planting right now. So any kind of bailout program could really disrupt markets in a meaningful way. And so I suspect that they're trying to be thoughtful about what are they going to announce and when they're going to announce it.

And, you know, what will the repercussions really look like? We've already seen so much back and forth on these tariffs. So it's really actually hard to estimate what the cost will be for farmers. Colin, you've expressed some doubt that another government bailout program would reach California farmers. Why? Well, it has to do with politics, Mina. The last bailout, there were actually two tranches that Marsha referred to.

totaled, I think, $23 billion. The lion's share of that went to the Midwest, where Trump has more support. In some cases, farmers in the Midwest were actually paid more than what they lost in the trade war, which is sort of unusual. In the case of California, my calculations are

that the California agricultural industry was paid about 50% of its losses. So they were not made whole by any stretch of the imagination.

We're talking with Colin Carter, Distinguished Professor of Agricultural and Resource Economics at UC Davis, and Marsha Brown, Food and Agriculture Reporter for Politico. And you, our listeners, are invited to join the conversation. What questions do you have about how the tariffs could affect the agriculture industry and specifically California's industry and economy? Do you work in the agri-food industries? How are you reacting to the trade war and uncertainty around the tariffs?

Are you concerned as a consumer about grocery prices rising? You can tell us by emailing forum at kqed.org, finding us on our social channels, Blue Sky, Facebook, Instagram, Threads, a KQED forum, or by calling 866-733-6786. 866-733-6786. More after the break. I'm Nina Kim.

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You're listening to Forum. I'm Mina Kim. We're talking about how tariffs and a trade war with China could affect California farmers. California is the nation's largest agricultural producer and exported nearly $24 billion in ag products in 2022, with almonds, dairy, pistachios, wine...

Thank you.

I want to bring into the conversation now Zach Pelka, co-founder and COO of Unfam Wines. It's based out of Sonoma. Zach, thanks for coming on Forum. Thank you very much for having me. So Unfam, you specialize in canned wines, is that right? That's correct. So what was your reaction, first of all, to the 90-day pause announced yesterday on sweeping tariffs above 10%? Did you breathe a sigh of relief in the same way that the stock market did or...

Yeah, I would definitely say there is a immediate sigh of relief, but the only certainty right now is uncertainty. And, you know, as an operator within the space, thinking about economic uncertainty at the moment, really, what does that lead to from sort of a business decision?

And I would say you look at immediately pausing hiring, cutting expenses, positioning a company defensively, which we know will lead to recessionary behavior and create this cyclical impact throughout the economy. So while there is an immediate sigh of relief,

I think that everyone feels like we're really actively in the eye of the storm. I mean, even overnight, we've gone from 125 percent tariff to 145 percent tariff on China. And really, we're sort of at the whim of what Trump feels like doing today, which doesn't exactly feel like the best operating framework for me to be making decisions from a daily basis.

Sure. And when Marsha was saying earlier that we're facing a lot of questions around exports, she also mentioned in terms of inputs or imports. And I'm wondering, in terms of imports, how you are affected right now by the tariff uncertainty?

Absolutely. So within the wine industry, I would really segment between two different key inputs, one being the raw material, so increasing our cost of goods, and then the second being the sort of capex, so equipment, machinery, etc. So from a raw input perspective, a huge one is glass, aluminum, paper, capsules, foils, labels, etc.

Really, everything outside of wine, a huge, huge import market is China. And so if you think about the average bottle of glass that you're drinking in wine, it's probably in the $1 to $1.50 range overnight.

145% tariff on that is going to have material impact to one, that raw cost input, but two, the availability for vendors within the US. So you're going to see both price increasing and availability challenged, which simultaneously will lead to another inflationary pressure at the same time. Now, if you think about on the CapEx side,

The stainless steel tanks, the pumps, the filters, bottling line equipment, really everything that is the raw machinery input that then leads to the production also is going to have a huge amount of cost implications overnight as well.

So you're basically going to be facing a domestic inflationary pressure on the production side of the business. So what does that mean? When you look at a winery or a small business that is running on fairly low margins to begin with,

When I receive cost increases, I basically am left with the decision of either A, eating that cost increase or B, passing it along to the consumer. And so unfortunately, given the state of so many US industries running on low margins, that cost has to be passed along to the consumers unless these businesses will go out of business.

And so as a result, this leads to additional inflationary pressure, which, as we know, will lead to really higher prices for pretty much any good or service you can think of, even in businesses like mine, which is fairly isolated from these cost inputs compared to other segments like consumer electronics, for example. And give us a sense of the challenges with regards to exports. I understand even before COVID,

You know, the major tariff announcement on April 2nd, you were already facing challenges or even cancellations of wine, chip and sack? Absolutely. We export to a number of different countries, our biggest market actually being Canada. And when Trump announced the early focus on, I guess, the fentanyl tariffs, as they're calling it on Canada, the LCBO, so the Ontario Liquor Board, announced overnight that they were canceling all

all purchases of U.S.-based wines. And so we had a number of large shipments coming from Sonoma to Ontario and now basically have that entire contract canceled at the moment. We've seen similar scenarios to Mexico. A big export market of ours is Japan. We know that there's really...

tenuous trade relationships just abroad. And then if you think about for a lot of other companies, I mean, the Chinese market is massive. It's about a billion and a half dollar export market annually, which I'd imagine overnight is completely dried up.

Yeah. You gave us a bit of a sense of some of the long-term things in terms of planning that you already have to account for with regard to staffing and so on. But tell me, is there anything that you are hopeful about in your long-term business planning? Maybe that, you know, we can reach some kind of a deal with other nations or I don't know. I'm just curious, Zach, if there's anything out there for you in this moment of uncertainty. I would...

I'd like to think that there are potential avenues for off-ramping from the existing sort of trade war that continues to escalate at the moment. I know within sort of the Wall Street world, there's speculation between if Trump is going to be

more following Secretary of Treasury Scott Besson's strategy or the Secretary of Commerce Lutnick's strategy. One appears to be focused on using tariff threats as a way to bring countries to the table to negotiate more favorable terms, which in theory could lead to better long-term export markets, potentially cheaper import costs.

However, Lutnik tends to be seen as believing that we want to keep tariffs in place just in perpetuity as a strategy. So I would say that amongst most of the operators I know, investors I know, everyone tends to be siding with Bessent, hopefully bringing to the table a set of deals which in theory could make the U.S. economy stronger. But as we know, it's very unclear what the current administration's true path is at the moment and which direction they're actually planning on taking.

Well, Zach, thanks so much for telling us what you're going through. I really appreciate it. Absolutely. Thank you. Zach Pelka is co-founder and COO of UnFam Wines based out of Sonoma. You, our listeners, are joining the conversation with your thoughts and questions. Stuart writes, you will see and hear how bad these potential tariffs will be for the wine industry, but they could benefit California grape growers with 80% discount.

This listener, Colin, isn't the only person I've heard raise this, that there's a possibility that California wines could become more competitive if...

you know, wines from other countries like France and Spain or Chile and Argentina become more expensive. What do you think about that? Well, they raise the issue of non-tariff barriers, which is important. But the point I'd like to make is that the United States also uses non-tariff barriers.

For instance, Peter Navarro, President Trump's trade czar, he likes to use an example of European non-tariff barriers on beef. The president himself, I've heard mentioned several times, Canadian dairy. He seems obsessed with Canadian dairy. And he says, well, the Canadians have tariffs of 250 percent or 270 percent. In actual fact, yes.

Apart from Mexico, Canada is a number one export market for U.S. dairy. U.S. sells over a billion dollars worth of dairy products into Canada every year. And guess what? They don't pay those tariffs. Canada does regulate its dairy trade through something called a tariff rate quota. You can sort of think of that as an import license. But it's also true that the U.S.,

uses these licenses under the World Trade Organization. But the last time I checked, you know, the United States had 54 import licenses in agriculture. Canada had 20. So if we're going to have that discussion, we should talk about U.S. sugar. U.S. restricts imports of sugar. Price of sugar in the U.S. is double the world level. So a level playing field is great, except

Peter Navarro and President Trump always fail to mention that the United States is doing exactly what they're accusing the Europeans and the Canadians of doing. Well, you're, I think, addressing Eileen's question, who writes, why is Trump obsessed with the Canadian dairy tariffs? Why does he think Canada is ripping us off? Let me go to caller Joshua in San Francisco. Hi, Joshua, you're on.

Hi, Mina. Thank you. Love the program. I grew up in Merced County, Atwater, the town where I grew up. We grow a lot of almonds. My grandfather works in orchards, runs an orchard.

And I'm first generation. And I want to bring up the point of the intersection between what's happening with immigration and who is actually providing our food, you know. And I think we can talk about tariffs and, you know, the lack of this or how we're going to sell whatever. But I think it's really important to mention that without these workers, we would not be fed.

And what I'm seeing, I was talking to my grandfather yesterday. He can't find anyone to come and, you know, harvest his, his, his nuts. And it's the season to go, you know, to pick and Americans don't want to do the job. Right. So that's why we rely on immigrants so heavily. And yet immigrants are afraid to show their faces now for the fear of being detained. And I'm really worried that the market, but you know, it's going to crash and it's going to fall apart. And unfortunately, you know,

That's kind of what I see going on with this tariff war, this trade war, whatever you want to call it. But I think that, again, I just want to mention that we don't see the people who pick our food. They're invisible to most of the world. And what happens when those people don't show up? And that's my comment.

Yeah. Josh, thanks. Joshua, thanks for that call. I really appreciate it. Marsha, curious if you've been hearing about this as well as just compounding the issues that are being brought on by the uncertainty around tariffs. And also, if you could comment on something that you reported on, which is that you feel like farmers are in a very different position, that they have less of a cushion to face tariffs and other challenges than they did during the first Trump administration. Yeah.

Absolutely, Mina. Thanks for that question. And thank you to the caller for the point on immigration. A couple things. Certainly, the tariffs have created so much uncertainty for farmers, for businesses throughout the supply chain. They're facing increasing costs. They don't really know whether it's the time to make an investment or buy a big, you know, make a big capital expense.

And one of those costs is labor. And I've heard a lot of farmers talk about the cost of labor going up. And if the immigration policies of the Trump administration continue to really pressure people, make people afraid to show up to work, to come to the fields, that will also raise prices, if not mean that there are some crops that end up rotting in the field.

And that is certainly a question that we're asking people about and we want to hear more about. At this point, I think there's sort of it's anecdotal and we're kind of looking to get more details on that. But in terms of farmers in a different position, I'm so glad you raised that. So

really farmers and consumers are facing several years of pretty significant inflation. Food prices are up about 20% from four years ago, and I'm sure everyone who's going to the grocery store can feel that. So with these tariffs, there's a lot less room for people to afford the

any more expenses on groceries. So that's that side of that coin. And same thing for farmers. Gas is more expensive. These different inputs like fertilizer or there was a mention of aluminum, whether you maybe you produce beer. Well, now beer is going to be more expensive or canned wine. And so all of these things have led to a place where farmers who already are highly leveraged and have really thin margins

are looking at this trade war and a lot of uncertainty and trying to figure out how are they actually going to make a profit this year. And so all of these factors combined, I think there is just less cushion for farmers going into a new trade war and a potential bailout might cost a lot more if USDA and the Trump administration finds the money to do it. Right, because as you were saying, the fund that they've used is almost depleted.

Yes. And, you know, at least one economist I was talking to pointed out that the federal budget is in a different place. You know, those 2017 tax cuts have also left a lot more cushion there. And we're looking at a new budget that Congress is pushing through right now that could also shrink what's available for the USDA.

And Colin, how rough has it been? I've been seeing so many, you know, reports and articles that have talked about how rough it's been for tree nut farmers, but that they were just starting to come out of things. But are they generally, would you say, in a weaker position than they were during the trade war of 2018? There's a little variation, Mina, across the type of product they're producing. For instance, the first Trump trade war,

was very hard on the walnut industry. And right now, walnuts are suffering. Farmers are putting their orchards up for sale or are ripping the walnuts out. In terms of pistachios, the worst is yet to come. Pistachios are still very big in China, and they will be hit hard by this new set of tariffs.

So, Marcia, I know that farmers tend to support Trump because they feel like he's good on water, but have some of the issues that have been brought up by tariffs and immigration. Do you hear or see any signs of that support for the president waning at all among the ag industry?

It's a good question. I just want to make one really quick point to your past question, which is also that the global markets have shifted since 2018, especially for soybeans. And so that's another factor for farmers. Those relationships are not what they were the first time around, and the uncertainty only adds to that. So that's the last thing I'll say on that.

As for, you know, is there a political reckoning in the countryside? That is certainly a question we are asking. I think one thing that has really resonated in a lot of rural communities were these cuts to local food programs. They were direct cuts.

contracts between farmers and schools and farmers and local food banks. And they were extremely popular. They kind of started out of the pandemic and then were continued and expanded during the Biden administration. And then the Trump administration, because of the way they were funded, was able to end those programs.

And that made people really upset. And a lot of those farmers also are very upset about that. And I think, you know, that is something that could shift the tide in some of those communities. I will say that, you know, a lot of those farmers were more small and midsize. And those farmers are not necessarily as pro-Trump as some of the larger scale farms you might see out in the Midwest.

But, you know, I think there's a lot of questions still. I think people, when they're deciding their political allegiances, there's a lot of factors. You know, they may be really happy with his immigration policies. They may like some of what he's doing on cultural issues. So I think the jury is still out on that one, but it's certainly something we're watching closely.

Well, Mark writes, farmers and people in the Central Valley of California voted overwhelmingly for Trump. What did they expect? Stephen writes, I have a feeling that most Americans and especially President Trump don't even realize that California is our nation's number one agricultural state.

We're talking this hour about how tariffs and a trade war with China could affect California farmers. We're talking with Marsha Brown of Politico and Colin Carter at UC Davis, a professor of agriculture and resource economics there. And you, our listeners, are sharing your thoughts and questions at 866-733-6786.

by posting on Blue Sky, Facebook, Instagram, or threads at KQED Forum, and by emailing forum at kqed.org. If you work in the agri-food industries, we'd love to hear from you. If you have questions or concerns about grocery prices or about how the tariffs related to agriculture could affect California's economy, share them. More after the break. I'm Mina Kim. Fast and reliable solutions from Comcast Business can help turn your business into a reliably up-and-running business.

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Welcome back to Forum. I'm Mina Kim. We're talking about how tariffs and a trade war with China could affect California farmers, our economy, our grocery prices. We're with Colin Carter, Distinguished Professor of Agricultural and Resource Economics at UC Davis, and Marsha Brown, food and agriculture reporter covering federal agencies in the business of food for Politico, and with you, our listeners, as well, at 866-733-6786.

And I want to bring in to the conversation now Congressman Josh Harder, who represents California's 9th Congressional District. He covers San Joaquin County as well as parts of Stanislaus and Contra Costa counties. Congressman, thanks so much for joining us.

Thanks for having me. And thanks for this discussion. So I understand you, Congress is trying to take steps to protect Central Valley farmers from the consequences or the worst consequences of tariffs and a trade war with China. What are some of the things that you're trying to do?

I mean, the best solution is just to reverse the uncertainty and the chaos that we've seen over the last few weeks. Farmers in the Central Valley don't want a handout. They want to be able to sell their crops to customers so they can eat it for dinner.

all across the world. We're the food and bread basket of the entire globe here in the valley. So we're trying to do some efforts to mitigate some of these damages, but understanding that there's just no bandaid that's going to accommodate for some of the fear and some of the costs that we've seen, especially for so many farmers that already feel like they're on the brink of losing farms that have been passed down for generations.

What are some of the programs that you want to make sure farmers are aware of where they could potentially get money to try to fill any gaps that are caused by this uncertainty? There really are no programs right now. USDA has said that they're discussing that. But frankly, we have no idea what they're going to actually decide to do. It feels like every single day we get a different answer from USDA. They're saying that it's going to be really tough to actually fund farmers.

the budget. So I think it's going to be hard to actually get more resources directly to farmers. And again, this is not a group of folks that are looking for government support as an alternative. We want to be able to sell our crops to folks that actually need it. So then are you not optimistic that we will see a bailout that would help California?

I think I wouldn't be surprised if there's something. We saw that during the first Trump administration. And, you know, don't get me wrong, that's helpful. But I just don't want to give thanks for somebody for only shooting me in the foot once. We have to be able to address the root cause of all of this uncertainty, which is leading to higher food costs and ultimately going to lead to lower quality produce in grocery stores across the country if these California farms are forced to close.

So I do think we're likely to see something from USDA, but it's going to be announced with a massive amount of press and a huge amount of support. I'm sure the president will talk about it incessantly, but it's not going to be enough given the cost we've seen over the last few weeks.

What are you hearing from your colleagues across the aisle with regard to, you know, trying to work to make Trump's pause on tariffs maybe permanent or try to bring them down even further? I think what I hear is, frankly, just an awful lot of confusion. I think both from members of Congress and the farmers in my district, there is a lot of hope that there is a grand strategy here, that we're going to be able to get a better result in

in the end. But every day that this trade war continues, we're seeing those costs build up. Every day we wake up, we have absolutely no idea what's going to be on the news. If you're deciding whether or not to buy a new tractor, what crops you want to plant for next year, you can't wait weeks on end for Washington to get its act together. So I hear some hope both in my community and in Congress that we're going to be able to get to the pot of gold at the end of the rainbow

But every day this goes on, it's going to be more and more difficult, and the payoff at the end is going to be smaller. I'm hearing that farmers are feeling like they have to tread a very careful line with this administration with regard to the fact that those who support him want him to stay strong on water, but at the same time, they don't want these kinds of tariffs and this level of uncertainty. Are you hearing that from farmers in your district, too?

I don't think there's much of a conflict. I think we can walk and chew gum at the same time. If this administration wants to push for initiatives that are going to help California farmers, let's do it. I don't think that should be in any opposition to trying to make sure that the needs of our growers are thought about as we're engaging in some of this bizarre trade wars that aren't leaving anybody better off. So absolutely, there's a lot of things that some folks in the Central Valley like that this administration has already done.

But we have to have the ability to call a spade a spade and to stand up on principle when we are looking at results that are making all of us worse off while making our farmers and producers suffer. There's absolutely no winners, I think, from this type of uncertainty and chaos. Congressman Josh Harder, his district covers San Joaquin County as well as parts of Stanislaus and Contra Costa County. Thanks so much for talking with us. Really appreciate it. Thank you.

So this listener writes, given that Trump has caused nothing but chaos, America is an unreliable business partner. These trade wars cost business in the long run since international customers have to take their business elsewhere until things resolve. Another listener writes, when you talk about prices going up from the tariffs, isn't that just non-staple foods? That's like how the prices of new cars would go up. That would just affect affluent people. Colin, what's your response to this listener?

Well, fruits and vegetables are an important import item. And those are also not only for affluent people, but they're considered healthier foods. So my concern is that these tariffs will have a larger impact on so-called healthier foods. It might be too expensive.

to buy fruits and vegetables for your children because of the tariffs. So instead, you have to buy them some cheaper food that is not so healthy for them. I think that's an important factor.

So, Marsha, we just heard from Representative Josh Harder about how frustrating things are in Congress, essentially. But and with regard to trying to understand the president's thinking around these things, what is Governor Newsom trying to do to address this trade war? So,

The governor is kind of like some other states trying to carve out a lane for California. And I'm sure Colin can speak more to this as well. But I mean, it's a really it will be a really interesting conversation.

moment if states like California are able to develop relationships with other countries and to build stability that way. I think your listener raised a really important point, which is kind of like what I was alluding to earlier about the markets have shifted even since 2018. I think farmers and American businesses

they just don't necessarily have the same market that they had before. These are global markets. They're very competitive. And these kinds of tariffs mean that China, for example, has really turned to South America on soybeans in a really significant way. And so it's a really interesting moment. And I will be very curious to see exactly what kinds of deals the governor is able to ink

Right, Colin. I mean, does Newsom have the power, the leverage to be able to engage in his own separate trade deals? I doubt it. I'm not sure that California could go on its own. But more importantly, he's trying to ask countries like China to exclude California products from the tariffs. I'm not sure why China would do that. The only way they can try and deal with

this trade war is to put some pressure back on the United States. They learned during the last trade war, which was a total disaster for California agriculture. It didn't change any of the behavior in China. They learned from that that there's certain pressure points and one being agriculture. And they're fully aware. There are nine congressmen from California. They're a Republican Party.

So from their perspective, why not put some pressure on those congressmen to try and reduce this ridiculous trade policy? This is Nora Blue Sky writes, have we learned nothing from the supply chain disruptions caused by the pandemic? I had a hard time getting my dog's food, not because the food wasn't made in America, but because the glossy bags used to hold it came from China. As a home winemaker, I buy bottles made in Canada.

On the line now is Joe Del Bosque, owner of Del Bosque Family Farms in West Fresno and West Merced Counties. Joe, thanks for coming on Forum. Thanks for having me here. Good morning. Good morning. Remind us what you grow, you know, organic melons, I remember, for the domestic market, but what else?

Yeah, we grow several varieties of organic melons. We produce those throughout the summer. We also grow organic processing tomatoes and almonds.

And then as a minor crop, we grow a few cherries. So the organic melons and the processing tomatoes, those are mainly for the domestic market, right? So I imagine it's almonds then that would be most affected by retaliatory tariffs from China and other international markets for you, Joe? Definitely the majority of almonds are exported. There's a few processing tomatoes that are exported too, but not as much as the almonds.

Yeah. So how are you feeling? How are you thinking about the impact potentially of these retaliatory tariffs? How are you planning around that? Well, there's definitely a lot of uncertainty. So we don't know what's going to happen. Every day is something different. And and so we're watching.

You know, our almonds are sold throughout the year, but most of last year's crop is sold. So we have a little bit of time between now and our next harvest, which is in September. Hopefully things get worked out during that time that we have a better sense of where we're going.

Yeah. Does that mean then that you're having to make decisions around planting? Is that getting harder with this? Not with almonds. You know, our trees are planted. You know, we're not planting anymore this year. So these are perennial crops that are already, you know, already growing.

So the 2018 trade war with China, we know California almonds took a big hit as well as other tree nuts. You know, were you affected? And if so, did you make changes based on that experience of 2018 with regard to what you grow or your neighbors? Well, you know, it was definitely an impact.

from 2018. And then there were other factors too that came in right with or behind that. We had COVID. We had issues with the ports and shipping that kind of extended the impact of 2018.

as far as our decisions of what we're going to do, a lot of growers in our area did not plant any more almonds during the past number of years, waiting to see what's going to happen. Yeah, Colin was saying that people also even pulled trees, uprooted trees as well, and took them out in terms of their circulation. So

Your trade groups are writing lots of letters. They're trying to engage members of Congress. How confident are you that they'll be able to work something out with this administration or that Governor Newsom will be able to do anything with regard to trying to create trade agreements with other countries? Yeah.

Well, we're optimistic that our trade groups are getting our message to Washington. California agriculture is the number one agriculture in the nation, and we do produce a lot of things that are only produced in California. So it is an important agriculture. So we hope that these –

These trade issues get resolved in time before a lot of our crops come off. So many of California's crops come off in the summer, a lot of fruits and vegetables and so forth. But there are other crops and products that are being shipped all year, like dairy. That's ongoing, and that's an important export product also.

Yeah. Joe, before I let you go, just curious, you know, the Central Valley overwhelmingly supported the president with the way that tariffs are going, the uncertainty there, immigration and so on. Have you seen any signs of that support waning?

Not really. I think a lot of people are obviously anxious to know where we're going. And, you know, I should say that the president probably had a lot of support in the farm sector because of the number, probably the number one issue for California agriculture, and that's water. And, you know, water affects all farmers. Trade affects export farmers.

So, you know, water is a big deal. And I should back up a little bit, too, that back in, you know, during those trade issues in 2018 and on, we also had a lot of issues with water shortages. And that was another factor in a lot of farmers not planting more almonds. So, yeah.

It's a mixed bag, right? There's a lot of things on farmers' minds right now. We're optimistic about water, but we're watching very carefully on what happens with trade. Joe Del Bosque, owner of Del Bosque Family Farms in West Fresno and West Merced Counties. Thanks again, Joe. Thank you. And let me remind listeners, you are listening to Forum. I'm Nina Kim.

Uh, James on discord writes, which domestic products are the easiest to pivot into if the tariffs stay in place? Marsha, I was struck by hearing Joe talk about, um, you know, some of the farmers no longer doing almonds because of water concerns, but also issues related to, um, fallout from tariffs and, you know, the pandemic and so on. But how easy is it to diversify like that if you're a farmer?

This is so important and I'm so glad your listener raised this. It's really, especially right now, it's not easy. Farmers have made planting decisions in much of the country right now and it's very hard to pivot for this growing season. Going forward,

They could make some changes, but that doesn't happen immediately. And it certainly is not going to happen within one year or even three years. And I think one thing that's interesting and I've been thinking about the past few months is that in the last administration, there was an effort to get farms to diversify, to have different streams of income on the farm, including growing different crops.

Now, a lot of that is labor intensive and there's a lot of barriers to entry on that. So again, not super easy, but really trying to push some federal investment into that kind of farming to give people a little bit more cushion. But some of those programs have

already disappeared in the current administration and some of those programs are actually frozen. The funding is frozen while they are reviewed. And some of that money has been freed up, but not all of it.

So I just think that that creates a lot of uncertainty and that also makes it harder to diversify into other crops. You know, you just you need different equipment. You maybe have to do different things with your soil. You might have to have more labor. So all of that makes it makes it difficult in the long run and in the short run to do that.

Steve on Discord writes, for businesses with long-term crops like tree nuts, the pivot strategy is often a losing proposition. They've got so much invested over time that they are counting on recovering. Colin, we just have 30 seconds, but I'm curious just to get your final thoughts with regard to what you see for California. Trump blinked. Do you think that the kind of hardships that your reports and papers have predicted with regard to California's economy will come to pass, or are you optimistic they won't?

I hope they won't, Mina. But I would like to say there's no way that California agriculture comes out ahead on this. This is a big mistake and there's no long run benefits.

Colin Carter, Distinguished Professor of Agriculture and Resource Economics at UC Davis. Marsha Brown, Food and Agriculture Reporter for Politico. Thank you both so much. And my thanks to our guests who joined as well, our farmers. And my thanks to Caroline Smith for producing this segment and to listeners. This is Forum. Funds for the production of Forum are provided by the John S. and James L. Knight Foundation, the Generosity Foundation, and the Corporation for Public Broadcasting.