Following President Donald Trump’s recent tariff decision, U.S. customs agents began collecting tariffs on all imported goods from various countries, with a baseline rate of 10% and higher levies on products from 57 major trading partners. One sector affected by the new U.S. import tariff regime is the floriculture industry. The potential impact of this measure on the global floriculture business has been significant, and its direct and indirect influence on the Ethiopian flower industry cannot be overlooked.
The U.S. floriculture industry heavily relies on imports to meet domestic demand, especially for popular blooms such as roses, summer flowers, and orchids. The daily demand for flowers is substantial, estimated at around 10 million stems. Domestic flower production in the U.S. satisfies only 20% of this need, with the remaining 80% filled by imports. Due to this supply gap, various countries are seeking to enter this lucrative market. Ethiopia, in particular, has been striving to maximize its share of the U.S. flower market for some time.
Recent statistical data from the Ethiopian Customs Commission and related reports indicate that the U.S. ranks sixth among the top ten flower market destinations for Ethiopian exports. Over the past four consecutive Ethiopian fiscal years, from 2020 to 2024, the volume of flowers exported to the U.S. market has grown at an average rate of 25%. During this period, approximately 7,977 tons of flowers were supplied to the U.S., generating a total revenue of about $45 million. This volume is significant when compared to the quantities exported to Japan, Italy, Germany, Spain, Canada, and neighboring African countries. The most important types of flowers supplied to the U.S. market include roses, summer flowers, and rooted and unrooted cuttings. There are seven farms supplying these products, all of which are foreign-owned.
Despite its potential, Ethiopia has yet to make significant advancements in fully capitalizing on the U.S. flower market for various reasons. Flower exports to the U.S. began in the early 2000s, but the country’s market share remains small, at less than 3%. The number of Ethiopian flower farms with strong market linkages to the U.S. market does not exceed 11%. However, this does not mean that the new tariff regime will have minimal impact on the Ethiopian floriculture industry.
In comparison, Latin American countries are in a more advantageous position to exploit the U.S. flower market for several reasons. For instance, Colombia and Ecuador, the world’s largest flower producers, benefit from geographic locations that enable them to export large volumes of flowers at relatively low freight costs. Their transportation systems allow for quick and cost-effective delivery, ensuring that fresh flowers reach the U.S. market promptly. Additionally, the U.S. has free trade agreements with Colombia and Ecuador, facilitating the growth of their flower industries through duty-free exports and enhanced competitiveness. Finally, decades of experience in the flower industry have resulted in well-established supply chains and logistics in these countries, ensuring a reliable flow of flowers to the U.S. market.
Due to these reasons, leading flower producers have a substantial comparative advantage over Ethiopia in accessing the large flower consumer markets in the USA. Like other countries, Ethiopian floriculture has been impacted by the Trump administration’s tariff, which imposes a 10% import rate. However, since Ethiopian flower producers have a minimal presence in the US market and do not primarily target the USA, the threat of tariffs appears to have a low impact on their exports and the US floral market. Nonetheless, the overall effect of this import tariff on Ethiopian flower exports remains uncertain due to several factors.
Ethiopian flowers primarily rely on the Netherlands market, which accounts for more than 67% of their share. The Netherlands is an important partner for Ethiopian floriculture, not only for its own domestic consumption but also for its role in re-exporting flowers to other countries. The new 20% import tariff imposed on Dutch exports will significantly affect the re-exported flowers from the Netherlands that originate from Kenya and Ethiopia. Consequently, this tariff will likely reduce the flower supply from the Netherlands to the US market, profoundly impacting Ethiopian flower growers’ ability to maintain a sustainable supply to the Netherlands as they did previously.
Additionally, we are uncertain about how other countries will respond to the US import tariff. According to the United Nations International Trade database of 2023, the market share of Latin American countries in Ethiopian exports has been growing over the past three years. For instance, in 2023, Ecuador exported 278 tons of flowers to Saudi Arabia. Saudi Arabia is the second-largest market for flowers after the Netherlands, accounting for 13% of the market share. If Ecuador and Colombia shift their exports from the US market to Saudi Arabia in response to the new tariff, this could lead to an oversupply of flowers in the Saudi market, ultimately reducing the prices that Ethiopian growers previously received. The United Arab Emirates (UAE) is also a rapidly growing cut flower market for Ecuador. Before the introduction of the US tariff, Colombia was a major supplier of cut flowers to the UAE, holding a significant market share of 27% of the UAE’s total cut flower imports. If Colombia shifts its exports from the US market to the UAE, this would create additional challenges for Ethiopian growers, as the UAE is a crucial market for them.
On the other hand, major flower-producing and exporting countries are significantly affected even by the baseline tariff rate of 10%. Colombia and Ecuador exemplify this. What distinguishes Colombia and Ecuador from Ethiopia is their large market share in the US flower market. Colombia supplies about 65% of the flowers to the US, particularly roses and summer flowers, which are in high demand year-round, especially around public holidays. Similarly, Ecuadorian flowers, particularly roses, are essential to the US floral industry, with a market share of no less than 25%. Thus, the 10% tariff imposed by the Trump administration will strain business relations and raise the cost of imports. This is likely to impact US wholesalers and retailers who rely on Ecuadorian and Colombian flowers to meet consumer demands at competitive prices. Many critics argue that this tariff will significantly affect Ecuadorian and Colombian flower producers, given their substantial market shares in the US flower market.
This tariff has increased the cost of imported flower goods, which is ultimately passed on to consumers in the form of higher prices. Higher prices can lead to a decrease in demand for flowers, as consumers may opt for cheaper luxury substitutes and reduce their spending on flowers. This, in turn, could discourage Ecuadorian and Colombian flower producers from creating supply, prompting U.S. wholesalers and florists to source more flowers domestically. Consequently, domestic flower growers might develop an appetite to expand and enhance local production.
While increased demand may benefit U.S. growers, many will face challenges in scaling production quickly. Domestic flower farming is labor-intensive and heavily relies on seasonal workers, often immigrants, a sector likely affected by immigration policies. Labor shortages could limit the industry’s ability to meet increased demand, potentially leading to supply shortages or higher prices. Moreover, expanding domestic flower production would require significant investments in greenhouses, transportation, and cold storage facilities. For medium and small farms, these costs may be unaffordable, especially if labor shortages persist.
Additionally, extreme weather patterns in the U.S. can impact the availability of flower varieties, complicating efforts to meet year-round demand without imports. Domestic growers may prioritize seasonal and regionally adapted flowers that thrive in specific climates, promoting a local-first approach to floral arrangements. While this could limit variety, it may appeal to environmentally conscious consumers who value sustainability.
This complex chain of responses may reinforce itself through a backward and forward loop, lacking a tendency toward equilibrium in the short run. Each iteration of response reinforces the previous one, continuing the cycle in the direction of market diversification. This incident serves as a reminder of how interconnected the flower trade, local business, and immigration policies can create uncertainty. While American flower growers may experience short-term benefits, the long-term implications for sustainable trade and international relations are far-reaching.
Flower-producing and exporting firms expected to be affected by the new U.S. import tariff are hesitant to respond to this situation, as the issue remains sensitive and unclear for many. Yet, one thing is certain: the floral industry, once a symbol of beauty and celebration, now finds itself at the center of a complex geopolitical debate—one with consequences that extend well beyond Valentine’s Day bouquets.
The writer can be reached via ehdaplan@gmail.com
