Iranian-Americans and connoisseurs of Persian cuisine are amply familiar with dried sour (tart) cherries. A staple of Persian and Middle Eastern cuisine, most Iranian-Americans and Iranians are unaware of the larger international trade story behind the dried fruit that is featured in so many dishes, jams, syrups and candies. Much like the storied history of the rivalry between California and Iran regarding pistachios, this new trade investigation pits Michigan against Turkey, no pun intended.
In the United States, an investigation into whether a foreign product is being sold at less than its fair value, or benefits from an unfair subsidy, begins with the U.S. domestic industry that produces a similar product to the imported one. The majority of U.S. domestic producers of the like product file petitions with both the U.S. Department of Commerce and the International Trade Commission (ITC). The Commerce Department investigates whether the foreign product is being sold at less than fair value and calculates a percentage to “correct” for the underpricing (countries that grant their companies significant subsidies, or have lax labor laws, are just two examples of how companies are able to “afford” such underpricing). The ITC investigates whether the U.S. domestic industry has been injured by the foreign imports. Only if both the Commerce Department and the ITC make positive determinations of undervalued pricing and injury will a trade remedy, or tariff as they are colloquially known, be put in place.
On April 23, 2019, U.S. domestic producers of dried tart cherries, who are mostly based in Michigan, petitioned the Commerce Department to investigate imports of dried tart cherries from Turkey. U.S. producers are arguing that the Turkish cherries are being imported into and sold in the United States for less than what it costs to produce them. In fact, the U.S. producers in Michigan are arguing that imports of dried sour cherries from Turkey are undervalued by more than 628%! As a result, U.S. producers of cherries are unable to compete with these unfairly low sales prices. Within 45 days of the petition filing, the ITC determines whether there is injury to the U.S. domestic industry. If it does so, the investigation proceeds to the Commerce Department, which will calculate preliminary corrective percentages, or margins, intended to “correct” the price of the imported goods at the border. The ITC’s preliminary injury determination is due June 7, 2019. Depending on whether there are any postponements on the side of the Commerce Department, preliminary tariffs are expected to go into place between late June to October. Over the coming months, keep an eye out for changes in pricing – if you have enjoyed a regular source of dried sour cherries and did not know they were Turkish imports, you likely can expect a price increase later this year.
by USIRCC Staff