The Mexican and Chinese import duties on European fries will be reduced from 13% to 5%. In the next 7 years, the tariffs from Mexico would even disappear completely. This means that the European French fries export has growth opportunities.
A serious one is raging between Mexico and the United States (US). trade war. This started with the import tariffs on steel and aluminum, which were imposed by the US at the beginning of June. In response, Mexico imposed 20% tariffs on imports multiple agricultural products from the US (such as fries).
Even without the duties on American fries, exports from the Netherlands and Belgium to the American country were already growing strongly. The reason for this is that European fries are relatively cheap. This despite the 13% levies that still apply to the import of European fries.
Double benefit
If 20% tariffs are imposed on American fries (and the tariffs on European fries decrease), the export of European fries to Mexico could grow enormously. The US and Canada currently (together) supply 95% of the potato products that enter Mexico. More than 140.000 tons of fries go to Mexico every year.
Mexico is a growth market for fries. In recent months, almost 15.000 tons have been imported per month. Since 2014, chip imports have doubled. However, the European Commission (EC) has not yet officially confirmed that import duties will be reduced.
China less protectionistThe trade conflict between China and US President Donald Trump has no influence on the reduced import duties. Chinese President Xi Jinping promised that he will implement a less protectionist policy. This is also evident from the fact that the levies are not only reduced for European fries, but also for fries from the US.
It is true that China has been importing fewer potatoes and potato products from the West for a long time. China imported 120.000 tons of fries this season, which is 5% less than in the previous season. This is because China is producing more and more of its own potatoes and fries.
Largest producer in the world
China is expected to harvest 97 million tons of potatoes this season. That is 5% more than last season. It is striking that potato prices in the country are currently at an 8-year high. This is partly due to increasing domestic growth.
Although gates are opening on one side of the world, there are also countries where protectionism is increasing. For example, Russia is considering European fries to ban.