China tariffs take toll on local produce exporter

OAKLAND, Calif. (KTVU) - The President's $200 billion in tariffs, announced Monday, now total $250 billion, seriously upping the stakes in the U.S. trade war with China. We're talking about money that will go directly from your pocket to the U.S. Treasury, a non-tax tax that nobody voted on.

Paramount Export of Oakland, is an 80 year old, employee owned company of 115 people exporting fruit and produce worldwide. Folks here, felt the first impacts in June when tariffs were hiked to 25%. Today, that's now a distant memory.

"Tariffs on lemons are up to $35 a carton which essentially doubles the price of the shipment," said sales associate Dave Najarian. "Already our customers say, we can expect a seventy to eighty percent decline in the volumes of produce that we're shipping  to China or to Hong Kong," said company president Nicholas Kukulan. That could end up being a $2 billion a year hit on agricultural exports to China on our farmers.

Tariffs are just one hit of a triple whammy. Whammy two: at Chinese ports, highly perishable shipments can be held up for days by Chinese government imposed inspections, chemical residue tests and bureaucracy.

"Yeah, it's true. I would definitely say there's more of this tit-for-tat going on. So, yeah, all the details are being ultra scrutinized. It's making everything just that more difficult to get into the country," said sales associate Joe Stewart.

Whammy three: Loss of Chinese customers to other nations who have the same products, lower labor costs and no new tariffs. "If that means looking to Spain, if it means looking to Egypt, some other sources for the same apples, grapes, citrus; they're gonna go for it and once it's gone, it's gone," said Mr. Kukulan.

It's very tough, say Paramount's sales force, to win Chinese customers back, especially if there are hard feelings on their part, which there are.

Then there's this. "We can't ship from the U.S. because of what we're going through now, so, we're forced to source ourselves from other countries when we should be supporting our farmers here in the U.S. Now we're having to go now and support the farmers in Egypt," said salesman Najarrian.

And remember, the Chinese not only own a trillion dollars of U.S. debt, they almost always take the long view.  "The Chinese don't back down. The Chinese are not going to lose face in this trade war," said company president Kukulan.

This is to say nothing of another $26 billion a year in other California exports to China and the damage all of that does to employment here including product makers and growers as well as truckers and ports who handle it all.