From SeafoodSource News
July 11, 2018
By Cliff White
The administration of U.S. President Donald Trump announced tariffs on USD 200 billion (EUR 170 billion) of Chinese goods on Wednesday, 11 July – the latest escalation in the ongoing trade war between the two countries.
The move will add 10 percent tariffs to a wide assortment of Chinese goods, with seafood featuring prominently. The 6,031 items included in the list published by U.S. Trade Representative Robert Lighthizer include a litany of seafood items, including many categories of shrimp, tilapia, salmon, pollock, tuna, flatfish, crab, scallops, squid, and fishmeal.
“As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional USD 200 billion of Chinese imports. This is an appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies,” Lighthizer said in a press release. “USTR will proceed with a transparent and comprehensive public notice and comment process prior to the imposition of final tariffs, as we have for previous tariffs.”
If and when they are imposed – scheduled for 60 days from their announcement – the new tariffs will cover almost 40 percent of the USD 505 billion (EUR 430 billion) worth of products China shipped to the United States in 2017. Retaliatory tariffs recently put in place by China on USD 50 billion (EUR 42.6 billion) worth of U.S. goods equate to about 38 percent of the USD 130 billion (EUR 111 billion) worth of goods the U.S. sent to China in 2017.
According to data from the National Oceanic and Atmospheric Administration, the U.S. imported USD 2.7 billion (EUR 2.3 billion) of Chinese seafood in 2017, while sending USD 1.3 billion (EUR 1.1 billion) worth of seafood to China.
Lighthizer said in developing the latest list of tariff-eligible items, his office included “subheadings that commenters suggested for inclusion in response to the 6 April notice” filed to impose a previous round of U.S. tariffs. SeafoodSource previously reported that U.S. Sen. John Kennedy (R-Louisiana) requested tariffs on shrimp and crawfish imports, while John Williams, executive director of the Southern Shrimp Alliance, called for the U.S. to impose tariffs on “all imports of merchandise produced through Chinese aquaculture.”
Lighthizer said the goal of the new tariffs is to pressure China to reduce its trade surplus with the United States, halt intellectual property theft, and open its markets to American companies. He said the previous round of U.S. tariffs had not achieved that aim.
“China has shown that it will not respond to action at a USD 50 billion level by addressing U.S. concerns with China’s acts, policies, and practices involving technology transfer, intellectual property, and innovation. Rather, China is responding to action at a USD 50 billion level by imposing retaliatory duties,” he said. “In order to enhance effectiveness, the level of the U.S. supplemental action must cover a substantial percentage of Chinese imports.”
The move represents a setback for seafood trade groups including National Fisheries Institute, the Pacific Seafood Processors Association, the At-Sea Processors Association, which had pushed the Trump administration to omit seafood from the trade war. It will also hurt U.S. seafood companies that send products to China for reprocessing, who found out they had escaped the latest round of Chinese tariffs last week, only to now face a new 10 percent tariff on products it brings back to the U.S.
In developing the list of tariff subheadings included in this proposed supplemental action, trade analysts considered products from across all sectors of the Chinese economy. The tariff subheadings considered by the analysts included subheadings that commenters suggested for inclusion in response to the April 6 notice. The selection process took account of likely impacts on U.S. consumers, and involved the removal of subheadings identified by analysts as likely to cause disruptions to the U.S. economy, as well as tariff lines subject to legal or administrative constraints.
The China-U.S. trade war is unlikely to end soon. Trump has said he is prepared to tax as much as USD 450 billion (EUR 383 billion) worth of Chinese products, according to The New York Times.
International stock markets reacted poorly to the announcement, with China’s main stock index losing 1.8 percent, Tokyo’s main index falling 1.2 percent, and a broad index of Europe’s biggest companies down 1.1 percent in morning trading, according to the Times. In the U.S., S&P 500 futures were down 0.7 percent, while Dow Jones futures had lost 0.8 percent as of Wednesday morning.
John Connelly, president of the National Fisheries Institute, the US seafood industry’s most influential trade group, is calling on US president Donald Trump and China to pick up a children’s book and end their trade dispute.
The White House late Tuesday announced that it was asking the United States Trade Representative to draw up a list of $200 billion worth of Chinese goods, including tilapia, shrimp and re-processed seafood, to hit with an additional 10% tariff. It was just the latest volley in an ongoing trade war.
Connelly issued a statement Wednesday asking policymakers on both sides of the dispute to “demonstrate real leadership by sitting down and negotiating before lasting and unnecessary damage is done”.
“The Dr. Seuss story of Two Zax who stand forever facing each other without compromise is not where this dispute should end,” he said.
Connelly called the US and China strategy of “placing unwarranted tariffs” on seafood products “misguided,” and warned that it will “only hurt workers and consumers in their own countries”.
“Grocery stores and restaurants thrive when they offer the public options,” he said. “Tariffs ultimately are taxes on American consumers that limit choice. Meanwhile, Chinese consumers will also be deprived of high-quality Maine lobsters, squid from New Jersey and California, and cod, pollock, and salmon from Alaska.”