Saimon Lomaloma, back left in white t-shirt, the owner of Wakanavu Kava in Fiji, says the 32 percent tariff means members of the Fijian disapora will have to opt to purchase other kava imports from Vanuatu, Solomons and Tonga, which would be cheaper than the Fiji kava. Photo: Wakanavu Kava
The 32 percent tariff that will be imposed by the United States on all Fiji imports will have negative impacts on American consumers and farmers, one of the country's biggest kava farmers to export said on Friday.
Wakanavu Kava director Saimon Lomaloma told RNZ Pacific that the tariffs announced by President Donald Trump last week have caused panic, and the flow-on effect will hit farmers.
The US market is Fiji's largest because two-thirds of Fijian kava exporters send their product to the American mainland.
They previously did not have to worry about tariffs because there were none they had to pay, or if there were any, they were minimal and barely felt.
However, that has changed overnight after Trump unveiled his tariffs.
Initially, there was a 10 percent tariff imposed by 5 April, and then the 32 percent kicks in on 9 April.
"The immediate thought was a bit of initial panic because our largest market for our kava is the US, and so to go to our clients and say, 'look, it is going to cost you an extra third on top of recent price increases due to shortages of kava across the Pacific', they are not going to be too happy about it, and it is going to fall on them, the importer, and the consumers," Lomaloma said.
"It is going to be Americans that are going to end up paying the additional cost. But it will have a flow-on effect back to the export industry for us, and for kava and other kava exporters and farmers.
"There was pretty much no tarriff. I believe, in 2020, there was a thing called a GSP exemption, in which, for developing nations, kava was exempt from tariffs.
"And if it was not exempt, it was it was minimal tariffs that your customs agents or broker factored into their fees. So to go from paying nothing to 32 percent is going to be a big shock."
Photo: SAUL LOEB
He said a lot of American consumers have different markets, with a big part of that being the Pacific Island diaspora.
Lomaloma believes the members of the Fijian disapora will have to opt to purchase other kava imports from Vanuatu, Solomons and Tonga, which would be cheaper than the Fiji kava.
That would have a flow-on effect that would impact farmers back in the islands.
"They use kava as a means to connect back to their culture, but depending on the disposable income, it just may end up being that they buy less, which then will have a flow-on effect to farmers," Lomaloma said.
A kava bowl Photo: RNZ / Jamie Tahana
"In rural areas that is their livelihood. There is a lack of economic opportunities in rural parts of Fiji, especially in Cakaudrove (in Vanua Levu), where we are based, and a majority of the households are subsistence farmers.
"So when they go to do their weekly shop and buy basic necessities, they do not have the disposable income and they are already struggling, and they use kava as a means to earn an income.
"And at their market are the local middlemen that will buy their kava, which either goes into the domestic market or export, and so that will hit them hard at a time where they are already struggling."
Lomaloma said the tariffs were unfair, especially when Fiji is being hit the hardest in all the Pacific countries.
He said it looks like Fiji is being unfairly targeted, and he can not fathom the reasoning used by the US government that Fiji has a 63 percent tariff on US imported items.
Fiji's Ministry of Finance said the 32 percent tariff on Fijian exports is "disproportionate and unfair".
In a statement, the Ministry said this is due to the fact 96 percent of US imports into Fiji attracts either zero duty or just 5 percent.
The Ministry states Fiji's exports to the US were just below F$500 million (US$250m) for the past 3 years, while imports grew from $190m (US$95m) in 2022 to $425m (US$212.5m) in 2024.
"Why is it that Fiji is hit with 32 percent, when some of the other Pacific Island nations are only hit with 10 percent, much the same as New Zealand, and although we do not want increased tariffs, 10 percent would be a lot more reasonable than jumping up to 32 percent," he said,
"As an export industry as a whole, it will suffer. It is already hard enough for our rural farmers. They are restricted in their access to markets controlled by middlemen."
Lomaloma believes there are no winners as both middlemen and exporters will feel the pinch initially.
He added they will slowly recover to "generally make good money off the hard working farmers".
On the other hand, he said, the tariff imposition could be a blessing in disguise if the Fijian government and stakeholders work on going to other markets, like the European Union and the Middle East, where kava can be used for different purposes like medicine.
