Original Story from Eugene Register Guard

The trade war between the United States and China has descended on Oregon, leading to tariffs on several of the state’s agricultural products and leaving observers to gauge the damage.

On Sunday, Beijing slapped extra tariffs of up to 25 percent on 128 U.S. products including frozen pork and certain fruits and nuts in response to steep U.S. tariffs on imports of aluminum and steel announced last month by the Trump administration.

In Oregon, the tariffs would apply to such ag products as hazelnuts, pears, berries, apples and wine.

“Our assumption is there will be some effect,” Alexis Taylor, director of the state Department of Agriculture, said on Tuesday. “What is unknown is whether Chinese consumers will be willing to pay more for our products, or if our competitors in the market will take the market share our Oregon companies have worked hard to establish.”

China is Oregon’s fourth-largest importer of agriculture products, behind South Korea, Canada and Japan.

In 2017, Oregon sent more than $320 million in agricultural products to China, including Hong Kong, according to Euromonitor.

Oregon leads the nation in hazelnut production, accounting for nearly 100 percent of U.S. output, according to the agriculture department. About 60 percent of Oregon’s crop is exported, with Asian and European nations buying much of the harvest.

China on Sunday imposed a 15 percent tariff on hazelnuts, also called filberts, and several other U.S. agricultural products.

However, China already had a 25 percent tariff on the hazelnuts — a high rate that had led processors to avoid dealing directly with the country.

“They already were so high that we weren’t shipping to them,” said Larry George, a member of the Hazelnut Marketing Board of Oregon, who manages his family’s hazelnut processing company in Newberg.

Hazelnuts are harvested in the fall. Growers in the southern Willamette Valley ship their crops to processors farther north, where the bulk of Oregon’s filberts grow.

Garry Rodakowski, who has a 60-acre hazelnut orchard in Vida and serves as chairman of the Oregon Hazelnut Commission, said his understanding is that processors typically rush to get hazelnuts exported to Asia before Chinese New Year, when he says filbert consumption peaks in the country.

“After that, the demand kind of slacks off,” Rodakowski said.

But most processors don’t ship filberts straight to China.

George said that instead, processors avoid high tariffs by selling to other buyers in Asia who have the ability to get Oregon hazelnuts into China.

He added that the hope among many in the industry is that the United States and China eventually will make a deal that works to lower tariffs for hazelnuts, which he said have been much higher than those placed on the almond and pistachio industries.

“It doesn’t appear to hurt us,” George said of the tariff increase. “We’re actually viewing this as an opportunity to have a broader discussion about tariffs.”

Overall, China is Oregon’s top trade partner, importing a wide variety of other products that are not subject to the new tariffs, including wheat and microprocessors and other components for electronic devices.

The Oregon Wine Board on Tuesday said China accounts for a fraction of the state’s wine exports.

Altogether, Oregon wineries produced 3.4 million cases of wine in 2016.

Out of 65,515 cases of wine exported from Oregon to other countries in 2016, only 2,475 cases went to China, the Wine Board said.

“While we obviously don’t welcome any tariffs or tax increases on our Oregon agricultural products as they are our lifeblood in Oregon, the new Chinese tariffs … are not likely to have serious effects in the near-term on many Oregon wineries,” Wine Board spokeswoman Sally Murdoch said. “That may change over time if they remain in place or escalate.”

Taylor, the agriculture department director, in May will lead a previously scheduled trade delegation to China.

“China is an exciting market,” said Taylor, who will visit Shanghai May 12-17. “The country is poised to add roughly 160 million middle-class households over the next decade. And those middle-class households are looking to buy products Oregon excels at producing, like fresh fruit, vegetables, dairy and meat. While there is some uncertainty around federal trade policies, we at ODA will absolutely continue to open doors for Oregon companies to build relationships in this export market.”

Follow Ed Russo on Twitter @edwardrusso . Email ed.russo@registerguard.com .