• The U.S. imposed a 20% tariff on cashew exports from Vietnam and a 40% tax on suspected transshipments.
• Vietnam supplies 90% of U.S. cashew imports and may reduce raw nut purchases from African countries.
• African processors urged to boost local transformation and reduce reliance on Vietnam’s supply chain.

On July 2, U.S. President Donald Trump announced a 20% tariff on exports from Vietnam to the United States, along with a 40% tax on goods suspected of being transshipped. The move shook the global cashew market, where Vietnam is a leading force, both in importing raw nuts and exporting processed kernels. Jim Fitzpatrick, a global expert in the cashew sector, shares insight into how this decision may affect international trade and what it means for African cashew-producing countries.

Jim Fitzpatrick 

EA: The new U.S. tariff applies a 20% duty on Vietnamese exports and a 40% tax on suspected transshipments. What could this mean for Vietnam’s cashew trade balance?

Jim Fitzpatrick: The new 20% tariff doubles the rate that was in place earlier this year. As for the 40% tax, I do not believe it applies meaningfully in the context of cashews.

Cashews undergo significant processing in Vietnam, changing the nature of the product. That usually qualifies as a change in origin under World Trade Organization rules. It would take a legal expert to confirm this, but in my view, transshipment concerns will likely not apply to cashews.

Cashews undergo significant processing in Vietnam, changing the nature of the product. That usually qualifies as a change in origin under World Trade Organization rules.

U.S. importers and roasters bought large volumes of cashew kernels through April and even May, building stockpiles in anticipation of the new tariffs. This helped soften the immediate blow to Vietnamese processors.

U.S. consumer demand for cashews remains strong. They have been a popular snack for decades and are now seen as a healthy choice, especially among younger people. The key issue is how demand will respond to higher prices.

There are two main points here. First, the retail price impact. Historically, Americans have continued to buy cashews even when prices were high. Past slowdowns in demand were more tied to economic conditions than to cashew prices. In 2022, demand dipped due to inflation, and there was also a drop in 2010–2011 following the financial crisis.

Second, on the wholesale side, this raises questions about how the added costs will be shared. Normally, importers pay tariffs. But many contracts were signed in advance and did not factor in the new duties. Those contracts may now need to be renegotiated. Supermarkets almost never absorb these extra costs.

This issue goes far beyond cashews and applies to all imported food items. We may see some importers try to renegotiate contracts opportunistically. Legally, they are not entitled to do so, but history shows it can happen.

The U.S. relies almost entirely on Vietnam for its cashew kernel imports. In 2024, 90% of imports came from Vietnam. No other country can offer the same balance of price and volume. U.S. buyers have not developed supply chains in Africa and moved away from India years ago. If they want to keep buying cashews, they will need to find a way to work with Vietnam.

The U.S. relies almost entirely on Vietnam for its cashew kernel imports. In 2024, 90% of imports came from Vietnam.

From Vietnam’s side, the U.S. market accounts for about 25% of its cashew exports. These often involve lower-quality contracts with smaller profit margins compared to deals with China or the European Union.

Vietnamese processors have already been diversifying their markets for several years, gaining ground in many parts of the world. They will continue to reduce their dependence on the U.S.

The sector in Vietnam is also undergoing restructuring, which is expected to continue or even accelerate. These processors are increasing the added value of their products and reaching out to more markets. In the long run, this could mean fewer raw nut imports from African countries.

The sector in Vietnam is also undergoing restructuring, which is expected to continue or even accelerate. These processors are increasing the added value of their products and reaching out to more markets. In the long run, this could mean fewer raw nut imports from African countries.

EA: Given Vietnam’s dominant role in cashew processing, what might this mean for local processing in producing countries like Côte d’Ivoire, Nigeria, or Benin?

JF: In my view, African countries are being unfairly caught in the crossfire of U.S. trade decisions. The U.S. does not grow crops like cashews, coffee, sesame, or cocoa, so why tax them? This only hurts small African farmers and raises costs for American consumers.

Initially, the new tariffs may reduce Vietnam’s imports of raw cashew nuts, which would cut into income for African growers. The impact on processors will vary by country.

For example, Côte d’Ivoire may face a duty rate of 21%, higher than Vietnam’s 20%. Ghana and Nigeria would face lower rates at 14% and 16% respectively, if full rates are enforced after July 9.

However, since African cashew kernels already sell at higher prices due to better quality, traceability, and geographic proximity, these tariff differences are unlikely to give African processors a major competitive edge in the U.S.

So far in 2025, only about 6% of U.S. cashew imports came from Africa, compared to 21% for the European Union. This means the new U.S. tariff will affect Vietnam much more than Africa.

So far in 2025, only about 6% of U.S. cashew imports came from Africa, compared to 21% for the European Union. This means the new U.S. tariff will affect Vietnam much more than Africa.

Given the current tariff setup, U.S. buyers have no clear reason to shift sourcing to Africa. Price remains their top concern, and that will not change.

Duty-free access remains open for other major markets like Europe, China, and West Asia. African processors should keep growing their presence in these regions.

China will be a highly price-competitive market, but African products can stand out in Europe thanks to their quality, location, and sustainable supply chains.

The key lesson from this “tariff war” is that African countries must take charge of their future in the cashew sector by growing their own processing industry.

Processing boosts market diversity and adds value. The industry needs long-term investors—both local and international. Strong ties with farmers are essential to build resilient supply chains and ensure stable incomes.

Public policy must support this development, but governments should not run processing plants themselves. That is not their role or strength.

Public policy must support this development, but governments should not run processing plants themselves. That is not their role or strength.

EA: More broadly, how might these tariffs affect the global cashew value chain and prices?

JF: In the long run, I believe these developments will speed up the restructuring of global raw cashew nut (RCN) trade, which has not been sustainable—economically or environmentally—for quite some time.

The speculative, opportunistic trade of raw nuts has not supported the structured growth of the industry.

Still, important progress has been made. Over the past 20 years, we have seen a clear shift in consumption toward Asia, with rapid growth in India first, and more recently in China.

At the same time, Africa’s processing capacity has grown by 20% per year over the past five years. I believe that trend will continue.

The cashew sector has weathered many storms—volatile prices, unstable policies. For example, last year prices rose by more than 30% after two years of depressed markets that hit a 15-year low.

Despite that, the sector has proven resilient. Global demand kept growing. Farmers kept tending orchards, and in many cases, even planted new trees.

Despite that, the sector has proven resilient. Global demand kept growing. Farmers kept tending orchards, and in many cases, even planted new trees.

More broadly, the U.S. trade policy since November 2024 has been full of back-and-forth deals and reversals.

Once the political leaders in Washington have gained the media spotlight from these tariff announcements, and inflation starts rising in the U.S. as a result, they may revise the rates.

There are mechanisms to adjust tariff levels, especially for agricultural goods from countries like Vietnam. So it would not be surprising to see the tariff on such goods return to 10% by the end of the year.