August 9, 2018 — The next round of U.S. tariffs aimed at Chinese imports could wind up hurting a major product that initially comes from America: fish.
Proposed 10% duties by the Trump administration last month on $200 billion worth of imports from China included dozens of varieties of fish, from tilapia to tuna. The proposed tariffs, which could increase to 25%, are set to be decided in September by trade representatives.
An estimated $900 million worth of fish and seafood on that list is first caught in the U.S., sent to China for processing into items like fish sticks and fillets, and then imported by U.S. companies to sell to American consumers.
“The value added is in another country, but essentially it’s an American-raised product,” Joseph Glauber, former chief economist at the U.S. Department of Agriculture, said of goods like fish sourced in the U.S. that are processed overseas and re-imported. He said the proposed tariffs could cut profits or boost prices throughout seafood supply chains, from fishermen to consumers.
The practice of sending fish to China to be breaded, seasoned, portioned or packaged has grown in the past two decades, according to U.S. fishing groups. Domestic seafood-processing plants have faced high costs and labor shortages, while cheaper facilities have sprung up in China to support its extensive domestic fish-farming industry.
That has helped make China the top source of seafood to the U.S., with the 1.3 billion pounds sent to the U.S. last year double that of second-ranked India, according to market-research firm Urner Barry.
The exposure of U.S. seafood to tariffs aimed at another country highlights how intertwined global supply chains have become. Many pink salmon, for example, are caught by commercial fishermen in southeast Alaska. The fish are transported to processing plants to be headed, gutted and frozen, before being loaded into shipping containers bound for China. Once there, they are thawed, deboned, smoked, filleted or turned into salmon burgers for sale world-wide, including to the U.S.
More than half of Alaskan seafood sent to China is processed and then re-exported, said Garrett Evridge, an economist with McDowell Group, an Alaskan research and consulting firm. The percentage can be as high as 95% for fish like sole, he said. The fishing industry, one of the largest private-sector employers in Alaska, provides about 60,000 jobs, he said, and Alaskan seafood makes up 60% of the nation’s catch.
Some Gulf Coast seafood producers had lobbied for the latest round of tariffs to include fish. In a letter to the Trump administration in May, the Southern Shrimp Alliance trade group said that Chinese-farmed fish tend to be raised with antibiotics, and imports unfairly compete with the group’s members.