On April 9, the US President Donald Trump paused for 90 days, with the exception of China, the additional country specific high import tariff rates he announced on numerous countries earlier that day, which helped to ease tensions in the cashew market. Vietnam is the largest cashew processor and was facing a prospect of a 46% import tariff rate on all its goods in the US including cashews. The minimum 10% tariff rate remains in place and some market players opine this still poses challenges for US cashew importers.
“The uncertainty is going to mainly affect the US market, no matter what the tariffs are. Some big buyers in the States are really concerned. They are willing to buy cashews from Africa but no one really knows going forward what the tariffs will be there,” a global trader said on Wednesday 9 after the 46% tariff rate on Vietnam temporarily took effect.
“The 46% rate was crazy and 10% is tough too. We are not sure how the is market going to react to this 10% rate,” a Vietnamese processor said.
“The big problem was that Vietnam was taxed 46% and the Cote d’Ivoire only 21%. With the 10% rate, the market will adjust. Buyers will have to pay the higher price or they will buy less,” a trader commented.
“This dramatic change in tariffs cannot be sustained, cashew business into the US will drop drastically. How can you think of a single rate for everything? This is just not going to work,” a broker noted.
As the market was preparing for the 46% import levy to take effect, US buyers and some large shippers in Vietnam withdrew from the market. Sellers were reportedly calling goods back from ports as US buyers asked to halt the shipping. The Expana Benchmark Prices for WW320 cashews remained unchanged week-on-week on April 10, at $3.30/lb fob Vietnam. However, the market fluctuated slightly either side of the 46% import levy announcement.
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Written by Jara Zicha
