Escalating global trade tensions are giving Chinese fruit stalls a little more of an international flavor.
Fruit distributor Sunmoon Food Co. is shipping navel oranges from Egypt, kiwis from Italy and apples from Poland into China for the first time ever. The produce will fill the gap created when the Asian nation slapped tariffs on U.S. fruit as part of the escalating trade war between the Xi Jinping and Donald Trump administrations.
With turnover of $45 million, Singapore-based Sunmoon is a minnow compared with fruit giants like Fresh Del Monte Produce Inc., which had revenue of $4.1 billion last year. But the new business it's doing in China underscores how the tariff tit-for-tat between the world's two biggest economies is reshaping global trade flows. China imported $6.2 billion worth of fresh and dried fruit and nuts last year, up nearly tenfold from 2015, customs data said.
"Like with any trade war or political upheaval, there will always be certain rebalancing along the markets," said Gary Loh, Sunmoon's chief executive. "Companies like ours can take advantage of this."
China's Ministry of Commerce in April levied a 15 percent import tariff on U.S. fruits and nuts, and in July added an additional 25 percent duty. The taxes were in retaliation against U. S.tariffs on $50 billion of Chinese goods. President Donald Trump is seeking to pressure China into reducing its trade surplus with his country.
Fruits and nuts are a relatively small part of the overall picture, comprising just $488 million of $130 billion total U.S. exports to China, said U.S. Census trade data. The Chinese market is one of the fastest growing in the world, though, and U.S. farmers will now find it that much more difficult to make potentially lasting connections there, said Richard Owen of the Washington, D.C.-based Produce Marketers Association.
Sunmoon counts China as its largest sales market, where it can reach 900 million mouths through its partnership with Shanghai Yiguo e-commerce Co., an Alibaba Group Holding Ltd. affiliate that owns more than half of the company.
It has benefited from the trade war by leveraging its network of suppliers in 18 countries and more than 15,000 wholesalers, supermarket chains and stores, Loh said. "It gives Southeast Asian countries a chance to see new varieties that previously they would not see in their market," Loh said.