Fruits and tree nuts face stormy trade amid US tariff threats

Trade liberalization, regional specialization, and year-round demand have transformed US agricultural trade over the past three decades. The US now faces increasing trade deficits in horticultural products and sugar, while maintaining surpluses in cereals, grains, oilseeds, and dairy. In recent years, the US agricultural trade balance has shifted from a historical surplus to a deficit.

US horticultural trade illustrates the economic theory of specialization and trade. Due to its comparative advantages, the US has a trade surplus in tree nuts like almonds, pistachios, and walnuts. Conversely, it relies on imports for fresh fruits, vegetables, flowers, ornamentals, and other products where its trading partners have climate and labor-cost advantages.

In this report, we estimate the potential effects that the imposition of US import tariffs would have on fruit and tree nut trade. While import tariffs are expected to raise prices in the US and reduce trade, factors like a stronger US dollar, taxable value share, import reliance, seasonality, and substitutability could mitigate these effects.

As the US market absorbs high volumes of fresh fruits and relies increasingly on imports, retail price impacts from tariffs would vary significantly across fruit categories and depending on domestic seasonal availability. Tropical fruits could see year-on-year retail price hikes of 9% to 18%. For fresh fruits with US domestic seasonal production and significant off-season trade, price increases would range from 0% to 18% throughout the year. Exporters to the US would receive lower prices if tariffs were imposed.

The US tree nut industry, which relies heavily on international markets, has been a target of retaliatory tariffs before. US almond exports to China already face higher tariffs in 2025. Potentially higher retaliatory tariffs and a likely stronger US dollar would impact the competitiveness of US tree nuts, but there could be some mitigating factors.