NEW YORK CITY — The New York Produce Show’s Global Trade Symposium on Dec. 2, explored the many challenges facing the North American fresh produce industry during a “Politics and Produce” panel discussion, moderated by Tom Stenzel of The Stenzel Group.
“The No. 1 issue that we’ve all been dealing with is the tariff issue in the United States this year, since President [Donald] Trump issued ‘Liberation Day’ back in the spring and imposed a 10% tariff on the world. How has that affected you or your constituents?” Stenzel asked the panel.
“It has definitely impacted us,” says Jessie Capote, executive vice president of J&C Tropicals. “Margins are down.”
Capote says J&C absorbed the 10% rather than pass it on to its customers.
“At the end of the day, the two most important stakeholders at J&C Tropicals are our growers and the consumer, and most of our decisions are based on the long-term success for both of those groups,” Capote says. “We didn’t think [passing along the additional cost] was the right thing to do long term.”
Tariff and trade wars have created a rocky road for Canada-U.S. relations. When the U.S. imposed tariffs on Canada, our neighbors to the north imposed retaliatory 25% tariffs on U.S. goods.
“That was a very contentious discussion, especially for citrus, tomatoes, peaches and a few other commodities, and they were removed in August,” says Ron Lemaire, president of the Canadian Produce Marketing Association. “But it really showed the dynamic of negotiations and how countries react to the administration in the U.S., and how the downward pressure, pressure from politicians, is truly impacting how businesses need to act.”
The impact of tariffs is broader than what’s been placed on fresh fruits and vegetables, Lemaire says. It’s also tariffs on materials from China used in creating produce packaging and more.
“The first thing we did when Trump won is we went out and pre-bought all of our chemicals, because we said, ‘he’s going to hammer China,’ said John Pandol of Pandol Bros. “A lot of our inputs went up. I bought them for last year, so with the crop I just finished, I had last year’s cost.”
But that $5 million was working capital “that’s not working,” Pandol says.
Fernando Cruz Morales of Grupo Consultor de Mercados Agricolas, a Mexican consulting group that analyzes the fresh produce market, says if the U.S.-Mexico-Canada Agreement is abandoned and 25% tariffs are imposed on produce from Mexico, prices will soar and supplies will be disrupted.
“GCMA has run some numbers in economic models, and we find that the prices of fresh produce in the United States will increase 30%, and the total production of Mexico will decrease around 12%, and the total amount of exports from Mexico to the United States in Canada will probably decrease around 35%,” he says.
Washington apple grower Chuck Zeutenhorst of FirstFruits Farms looked at tariffs from the lens of the exporter.
“Obviously the USMCA piece is a big deal, but we are up against tariffing,” he says, noting that the U.S. apple industry exports to 40 to 50 different countries with Mexico and Canada, its two largest trading partners.
“In other producing countries, it’s not a level or a fair playing field,” he says. “Many times, other countries are going in with apples that have no tariff whatsoever.”
Zeutenhorst says the apple industry took a hit when the first Trump administration imposed steel and aluminum tariffs and countries including India and China retaliated.
“During Trump one, those tariffs basically took China and India out of our opportunities because their retaliation tariffs were so large that we couldn’t afford to go in there,” he says.
U.S. and Canada Produce Relations
Recent tensions around tariffs and trade and Trump referring to Canada as the 51st state drove many Canadians to eschew products, including produce, from the U.S.
“Three in five Canadians in February of last year were not going to buy U.S. products,” Lemaire says. “We’ve never seen the Canadian perspective consolidate and gel like we have since President Trump, and that has truly driven behaviors. Right now, 63% of Canadians still feel the increased cost of food is due to the U.S. administration and its tariff strategy.”
Lemaire says the diversity of trade channels have already changed. Canada is now purchasing high volumes of Australian, Morroccan and Spanish citrus, for example.
“There’s a massive shift in behaviors of buying because of what we’ve seen in play,” he says.
But Lemaire says things are calming down.
“We’re down to about a third of Canadians saying they will avoid or make a choice depending on price or other factors, on U.S. products,” he adds. “So we’re seeing light at the end of the tunnel, but it all comes back to a perspective of, how do we work with each other in North America? And it will take time to rebuild.”
The California wine industry has also been impacted by trade wars with Canada, as Lemaire says Canada has banned the sale of U.S. wines in Canada.
The Packer spoke with Lemaire following the panel discussion to learn more.
“What really happened in Canada was a patriotism that grew out of comments from the administration; that really drove behaviors to look at buying anything but American,” Lemaire says. “And on top of that, within the provincial framework, the provinces are responsible for our liquor control boards and purchasing and selling and importation of liquor around the country, and they made decisions actually to pull U.S. product off the shelf because of tariff discussions, because of the trade discussions. And that was a political move at a provincial level, and it’s caused significant impact to the U.S. wine industry.”
As for fresh produce, Lemaire says progress is being made.
“When we look at fresh produce, Canadians are starting to shift their behaviors, with about 31% that are looking at not buying U.S. product, where you have 69% saying, ‘You know what, I will either avoid or not buy U.S. product.’ Now that is down from well over 70% at the beginning of the administration, when everything was heating up. So, the good thing is, we’re seeing trending away from behaviors that are really not sustainable long term when we look at the importance of our integrated market in Canada.
“But there’s a lot of work to do to try and regain the trust of Canadians on the U.S. commodity markets as well as U.S. products in general,” he continues. “Our work’s cut out for us, but it’s important that we drive forward together to try and find solutions, because without an integrated North American market, the only losers are the consumer.”
As we approach the July 2026 six-year review of USMCA, how are Canadians feeling?
“If we see a real turbulent negotiation that Canadians feel their backs are being placed against the wall, it’s not going to help the entire perspective on purchasing U.S. products,” Lemaire says. “But right now, especially around food, we’re seeing alignment between philosophies, especially within the U.S. state officials and also the Mexican government. And we’re very hopeful that as we move forward, we’re going to see a strategy and clarity around the trade discussion within USMCA and hopefully build on that so that Canadians will be buying strawberries and citrus out of the U.S. and happily consuming them.”
