Chinese customs expands checks on U.S. fruit imports - sources

By Yawen Chen and Karl Plume

BEIJING/CHICAGO (Reuters) - China's major ports of entry have ramped up checks on fresh fruit imports from the United States, five Chinese industry sources said, which could delay shipments from U.S. growers already dealing with higher tariffs as Sino-U.S. trade ties worsen.

Fruits were among 128 U.S. goods that China slapped with more expensive import tariffs in retaliation for U.S. levies on Chinese steel and aluminium as trade tensions between the world's two biggest economies flared this year.

A U.S. trade delegation led by Treasury Secretary Steven Mnuchin is in Beijing for talks with Chinese officials. The two sides are expected to discuss an array of U.S. complaints about China's trade practices, from accusations of forced technology transfers to state subsidies for technology development.

Since last week, Beijing has dispatched quarantine experts to major ports including Shanghai and Shenzhen to make more thorough on-site checks for disease and rot, a source based in Shanghai with direct knowledge of the matter told Reuters, declining to be named due to the sensitivity of the matter.

"China has resumed the practice of inspecting every batch of U.S. fresh fruit," the source said, adding that inspectors had previously checked only around 30 percent of shipments. China had dialled back the checks in November 2017.

Since Monday, all U.S.-originated fruit shipments have been subject to up to seven days of quarantine check on arrival in Shenzhen, said an industry source based at the port in China's south.

Previously, Chinese custom officers had let shipments through while they conducted sample checks.

Several containers of oranges imported by the source's company from the United States have been intercepted this week, the Shenzhen industry source added.

China's customs office could not be immediately reached for comment outside business hours.

Several batches of U.S apples have failed quarantine inspections and will be returned to the United States, the Shanghai source with direct knowledge of the matter said.

Washington-based Chelan Fresh sales manager Bryan Peebles said he had heard of some shipment holdups, but that his export business, which includes apples and cherries, was not affected in recent weeks.

"There has been news of detaining of fruits - citrus and a little bit of apples," he said, adding that exporters will get a better handle on any heightened scrutiny when the year's first California cherry exports arrive in China this week.

The United States sold $18 million of fresh apples to China in 2017 out of $872 million in total exports, according to the U.S. Department of Agriculture.

The more thorough inspections came as the cherry season on the U.S. West Coast kicked off. Shipments from Washington state typically begin in June.

Likely days-long delays during the height of cherry shipping season this summer will raise the risk of spoilage at ports of entry, said Keith Hu, director of international operations for the industry group Northwest Cherry Growers.

"During the peak of our season, there is no way that they will have enough refrigerated storage for our cherries. The chances that our cherries will be destroyed under the sun is far greater," he said. "We're looking at alternative markets."

China is the third-largest export market for fresh cherries from the United States. U.S. exporters shipped $119 million of fresh cherries to China, just under a third of total shipments worth $605 million in 2017.

Fruits have previously been a casualty of bilateral trade spats. Several years ago, China banned some imports of Philippine fruit as bilateral ties deteriorated over a maritime territorial dispute in the South China Sea.

One Chinese online retailer that imports and sells U.S. cherries has suspended plans to promote U.S. fruits, a source at the company said.

(Reporting by Yawen Chen in BEIJING and Karl Plume in CHICAGO, additional reporting by Ann Saphir in San Francisco; Editing by Simon Webb and Meredith Mazzilli)