The trade war between the United States and the European Union has concluded with an agreement after months of negotiations. As part of the deal, a 15 per cent import tariff was set on European agricultural products, instead of the initially threatened 30 per cent.
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According to sector analyst Jelmer Schreurs of ABN AMRO, the impact on Dutch fruit and vegetable growers and traders will be relatively limited. "For the Dutch fresh produce sector, the damage is not too bad," says Schreurs. "The biggest hits are in product groups such as fish, dairy, and meat. For fruit and vegetables, we expect a decline in exports to the U.S. of around 31 per cent, amounting to 93 million euros. Compared to total Dutch agricultural exports, this is a limited share."
Price pressure from additional U.S. supply
Although the direct impact on Dutch fruit and vegetable exporters appears minor, Schreurs does warn of indirect effects. The agreement also expands European import quotas for dried fruit, potatoes, and certain vegetable products, among others. This will allow more U.S. goods to enter the European market, creating additional competition and price pressure. "In the Netherlands, dried fruit represents a relatively small segment, think dates or apricots, products that mainly come from other countries. For fresh produce, the impact is even more limited. The volumes arriving from the U.S. are small compared to the total European supply," Schreurs explains.
Little change for growers
For Dutch growers and traders, pricing remains largely determined by supply and demand within Europe itself. "Fruit and vegetable prices in the Netherlands are much more influenced by factors such as weather conditions, crop yields, and European consumption patterns," Schreurs says. "The trade deal with the U.S. plays only a modest role in this."
Import tariffs on soy and maize off the table
For Dutch livestock farmers, European countermeasures must be withdrawn. This means that import duties on products such as soy and maize, essential for the feed industry, will not be introduced. This will help limit cost increases and inflationary pressure.
Sustainability rules as change
A striking aspect of the deal is that European values around sustainability and food safety were partly used as bargaining chips. For instance, the European Commission is considering relaxations in regulations on food certification and anti-deforestation legislation. Critics fear this could weaken European standards. Schreurs stresses that this risk is real but difficult to measure. "Europe was always known for taking a hard line on sustainability. Now there seems to be more willingness to make concessions, although Brussels itself denies this. For Dutch growers, it could eventually create an uneven playing field if national legislation is not adjusted accordingly."
Stability of the deal uncertain
Still, the future of the agreement is far from guaranteed. There is resistance within the European Parliament, and uncertainty also remains on the U.S. side about the legal basis for the import tariffs. "It remains pie in the sky," says Schreurs. "Political dynamics could still overturn the agreements."
Relatively unscathed
For the Dutch fruit and vegetable sector, the focus for now remains on Europe. Export volumes to the U.S. are small, and competition from U.S. imports is limited. As a result, Dutch fruit and vegetable growers appear to emerge from the trade war relatively unscathed, for the time being.
Read the full report here (pdf)
For more information:
Jelmer Schreurs
ABN AMRO
06-26006218
[email protected]
https://www.abnamro.com/