Wisconsin cranberries on European Union target list for retaliation tariffs

Wisconsin cranberries have joined Harley-Davidson motorcycles on the European Union’s list of products that could be slapped with tariffs in retaliation for President Donald Trump’s tariffs on imported steel and aluminum.

Europe is the largest export market for U.S. cranberries, and Wisconsin is the world’s top producer.

On Wednesday, EU Trade Commissioner Cecilia Malmstroem confirmed that U.S. cranberries, bourbon, peanut butter and orange juice are now on a list of high-profile products facing counter-measure tariffs.

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The list has been circulated among EU member states for approval.

The threatened sanctions come in response to Trump’s pledge to place a 25% tariff on foreign steel, and a 10% tariff on foreign aluminum, to support the U.S. steel and aluminum industries that have been hard hit by cheap imports.

The U.S. ships more than 95 million pounds of cranberries a year to countries in the European Union.

Nearly 40% of the crop is exported, and in some years, Wisconsin has accounted for more than half the world's supply of cranberries.

For cranberry growers, the threat of tariffs in the EU's 28 countries comes at an especially bad time, with growers awash in too much fruit and low prices.

It "would significantly hinder our ability to compete in these markets,” said Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association.

Cranberry growers say they've spent more than 20 years cultivating sales to Europe. Currently, many but not all cranberry products are shipped to the EU duty-free.

Additional tariffs would be a major setback, said Matthew Lantz, who does trade policy work for the U.S. Cranberry Marketing Committee, based in Wareham, Mass.

“The biggest concern is that Canadian products would continue to enter the EU duty-free, while our products would not. We would be at a price disadvantage," Lantz said.

Last year, the total value of U.S. cranberry exports to the European Union was nearly $130 million, one of the highest amounts in five years.

But the market price for the fruit has fallen below the cost of production, as global supplies have outpaced demand.

Tariffs on cranberry products vary by country and product. In some cases, they are more than 17%, for example.

No specifics yet

The EU has not said what its counter-measure tariffs would be on the U.S.-grown fruit.

But "it would be very detrimental to our industry," said Michelle Hogan, executive director of the U.S. Cranberry Marketing Committee.

Malmstroem said it was alarming that Trump would introduce tariffs against strong U.S. allies, and EU officials have doubts that the moves comply with World Trade Organization rules.

"This would be damaging to trans-Atlantic relations but potentially also to a global rule-based trading system," Malmstroem said.

She said EU officials were "intensively talking to our American partners ... to try to explain to them and to ask Washington for a rethink."

Presumably, tariffs on U.S. cranberries, peanut butter, orange juice and other products would remain in effect as long as Trump imposes duties on steel and aluminum from the European Union.

Last week, Trump said his tariffs would be in place "a long period of time."

Some have speculated that the EU has targeted Wisconsin for tariffs on Harley-Davidson motorcycles and cranberries because it's home to House Speaker Paul Ryan. Likewise, peanut butter could be on the list because peanuts are grown in Georgia, home to U.S. Agriculture Secretary Sonny Perdue.

But countries sometimes "rotate tariffs around just to cause pain in different areas," Lantz said.

"Once they've gotten what they think they can out of the cranberry industry, maybe they'll switch to something else," he added.

European cranberry importers are likely to object to tariffs on U.S. products because it would increase their costs, according to Lantz.

"There will be some people fighting this in Europe," he said.

USA Today contributed to this report.