"International agriculture businesses with investments like distribution networks and subsidiaries in the U.S. are weathering tariffs, which have caused them to alter their business activities, renegotiate contracts with distributors and even threaten to price them out of the market, experts tell Fortune. In response to these produce tariffs, foreign investors are considering bringing claims against the U.S. under international investment treaties, which include a myriad of stipulations like fair and equitable treatment and protects against depriving investors from benefiting from their U.S.-based investments."
"Produce imports on goods largely grown outside the U.S., including bananas, blueberries and avocados, totaled more $33 billion last year. Many large, internationally-based agriculture companies establish U.S. subsidiaries instead of selling directly to wholesalers, investing in machinery, workers, and a distribution network to sell its product. But tariffs have squeezed margins for these commodities, which has made U.S. portions of these ag businesses hard to sustain, Tiffany Comprés, founding partner and co-chair of international disputes at Pierson Ferdinand LLP, told Fortune."
""Fresh produce has had no tariffs since around the 90s," Comprés said, adding that investments in a U.S. distribution network for fresh produce sellers were made under the expectation that tariffs would remain at zero."
Foreign agricultural investors with U.S.-based subsidiaries and distribution networks are considering arbitration claims that recent tariffs violate international investment treaties providing protections like fair and equitable treatment. Many international produce companies invested in U.S. operations under expectations of tariff-free market access. Tariffs on imports such as bananas, blueberries, and avocados have tightened margins, forced renegotiations with distributors, altered business activities, and in some cases threatened to make U.S. operations unsustainable. Some investors view the tariffs as effectively destroying certain agricultural businesses and are exploring treaty remedies against the U.S. government.
Read at Fortune
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