Trump Threatens $275 Million Tax on US Sfd Consumers With $2.75 Billion Tariffs on Chinese Seafood
SEAFOODNEWS.COM [SeafoodNews] [Analysis] by John Sackton – July 12, 2018
Get ready for a big seafood tax. This is going to be the result of President Trump’s unilateral attack on Chinese imports, as applied to the Seafood Industry.
Overall, Trump is escalating his trade war by targeting $200 million worth of Chinese Exports to the US. The target includes all Chinese seafood products exported here, including reprocessed products. The full list was released by the US Trade Representative. Unless there is a dramatic intervention by Congress to take back this trade authority, new tariffs will likely be imposed within two months.
The total value of US Imports of Chinese Seafood is $2.75 billion. An across the board 10% tariff is the equivalent of a $275 million dollar tax on Americans.
Overall, the US imports nearly $18 billion worth of seafood each year. China accounts for 15.4% of all US seafood imports.
But within individual seafood categories, the portion of Chinese imports is much higher.
Frozen Tilapia, the largest Chinese Import, represents 80% of all US frozen tilapia. Retailers will see an immediate unwelcome jump in tilapia prices if the tariffs are imposed.
Frozen cod fillets mostly come from China. 70% of US imports of frozen cod will be hit. Haddock will be hit also. 64% of US haddock fillets are processed in China.
Pink salmon is another major Chinese export to the US, often including US caught fish that is processed in China. Pink salmon is used in lower cost salmon items like burgers and formed fillets. China imports represent 23% of all frozen salmon fillets.
The list goes on.
China represents 47% of US breaded shrimp imports.
They represent 37% of frozen squid imports; and 92% of dried squid imports. Also 92% of Crawfish imports. Tail meat will be going up in price, likely to the delight of Louisiana producers, but to the detriment of Louisiana restaurants. Diners will be paying the crawfish tax.
Frozen scallops will also be affected. China supplies 20% of the US frozen scallop market.
These just are some of the top species by value.
Down the list which encompasses 291 different seafood products, are smaller volume items like salmon fillet blocks, twice frozen pollock blocks, and cod blocks, all of which are not in the top tier for imports, but where China produces a substantial percentage of what is used.
No one in the seafood industry deserves an involuntary sudden price increase. Yet this is exactly the impact of these tariffs.
The negative economic effects will go far beyond the $275 million which is a direct consumer tax. As sellers are forced to raise prices, competitive products not from China will follow suit, so the tariffs will trigger across the board price increases for a range of items.
Price increases generally discourage consumption, so at the same time that sellers are paying the tax, they are losing business as well because their customers are backing away.
Unfortunately, it will be months before we see the actual impacts, and by then the trade barriers will likely be locked in place, so there is little recourse.
The seafood industry is not the only industry impacted, obviously. Trump may be aiming at China, but he has shot his own side. Who will take the gun from his hands?