Saving Seafood

NOAA Says Seafood for Reprocessing Exempt from Chinese Tariffs, but Rebate System May Impose Costs

June 28, 2018 — SEAFOOD NEWS — NOAA has confirmed via email to people in the Alaska seafood industry that the 25% Chinese retaliatory tariff will not apply to re-processed products for export.

John Henderschedt, NMFS director of the Office of International Affairs and Seafood Inspection, wrote  “In consultation with Embassy Beijing, NOAA Fisheries has confirmed that the following products are not subject to the additional 25% tariff recently announced by the Chinese government:

-Imports of U.S. seafood that is processed in China for re-export and some fishmeal products.”

“Affected U.S. seafood exports arriving at Chinese ports on July 6 or later will be subject to the new tariff rate,” he said in an email dated Tuesday, June 26th.

There was some uncertainty following China’s June 15 announcement at the beginning of a long holiday weekend for the Dragon Boat Festival that prevented clarification until government offices re-opened last Tuesday, June 19th, according to Jim Gilmore, Director of Public Affairs for the At-Sea Processors Association.

“Really, no one knew at that time, so the news coverage was of an issue with a lot of confusion and not much time for the U.S. government to get clarification.  The holiday didn’t help matters, but it might also have been that the Chinese government language wasn’t clear.  Not sure what factors were all at play,” Gilmore said.

One unresolved issue is that China has two types of import exemptions for re-processing for export.  One involves no tariff, for products that are exempt, and the other collects the tariff, but then rebates the value back to the company when the product is exported.

One sentence in the Chinese announcement suggests that the 25% tariff will be applied to everything, but then rebated for products that are exported.  When asked about this, Henderschedt had no comment.

If this is the final interpretation, the tariffs will add significant costs for exporters, even though they will ultimately get the 25% tariff refunded.  For example, a Chinese plant that purchases 1000 tons of cod for re-processing and pays $3.6 million, would have to pay an additional $900,000 to bring the product into the country, but then get this money back when the product was exported.  This adds costs to the process, even if the tariffs are ultimately not applied.

Ultimately, the answer will come after July 6th, when importers of record have to deal with Chinese customs officers.

Jim Gilmore says not much of offshore Alaska’s pollock is re-processed.  His group, the At-Sea Processors Association,  represents the Bering Sea pollock factory trawlers. He said that’s more common with salmon and cod.

But shore plants, especially in the Gulf of Alaska, export a lot of H&G pollock for reprocessing.  In fact, Trident recently spent millions of dollars in the last several years to upgrade its plant in Kodiak to efficiently produce a frozen H&G product.

Also the Bering Sea Amendment 80 factory trawler flatfish fleet’s catch goes to China for reprocessing, especially yellowfin sole, according to Chris Woodley, executive director of the group’s trade association, the Groundfish Forum.

The vast majority of the U.S. exports of frozen seafood to China are reprocessed in China and then re-exported, Woodley said.  Such U.S. exports to China that are then re-exported from China are not subject to Chinese duties or the Value Added Tax (VAT).  However, U.S. seafood exports that are imported for consumption in China face high tariff rates.  For example, frozen flatfish species, and other Alaska seafood exports to China that are consumed in China currently face a duty of 10 percent and are also subject to a 13 percent  VAT.

The Dragon Boat Festival is held annually in honor of poet Qu Yuan, who drowned himself in a river in 278 BC, as a political protest. Villagers tried to save the beloved figure in their little boats, but when they couldn’t find him, they threw rice in the water in the hopes that the fish would eat the rice, and not the poet and activist, during the Warring States period of Chinese history.

This story originally appeared on SeafoodNews.com, a subscription site. It is reprinted with permission.

Tariffs ding commercial fishing industry

June 27, 2018 — Fishermen and seafood harvesters may take a major trade hit with the announcement of new tariffs from China, though the details still aren’t clear.

The country announced new tariffs on a broad cross-section of American seafood products on June 15 in response to a U.S tariff hike on imported Chinese products. If the tariffs are approved, China will apply a 25 percent tax to items like Pacific salmon, cod, Alaska pollock, flatfish, crab, shellfish and other commonly exported seafoods.

China is a major trade partner for the Alaskan seafood industry. Processors regularly ship salmon that have been headed and gutted to China to finish the processing and packaging before being re-exported to the rest of the world. China is also a major consumer of seafood products within its borders, and a 25 percent tariff could push down imports.

It’s possible the tariffs won’t be implemented at all, or there may be exceptions, said Garrett Evridge, an economist with the McDowell Group.

“At this point, there’s a lot of outstanding information that we’re still trying to get our fingers on,” he said. “It’s actually unclear as to whether re-exported seafood is going to be excluded.”

According to an announcement from the Alaska Seafood Marketing Institute, multiple contacts in China have indicated that customs officials would exclude products intended for reprocessing and export.

“It is not yet clear how product entering China will be differentiated between export and domestic consumption upon entry or at what point a tariff and/or credit will be applied,” the June 22 announcement states. “This is a developing situation and ASMI will continue to provide updates as information becomes available.”

The Alaska Seafood Marketing Institute has maintained a Chinese office in Hong Kong since 1997. On a recent trade mission to China, Gov. Bill Walker took several representatives of the seafood industry with him specifically to build relationships between Chinese and American companies for seafood trade.

Read the full story at the Peninsula Clarion

Alaska-based Coast Guard cutter detains Chinese-flagged vessel for suspected illegal fishing

June 25, 2018 — An Alaska-based U.S. Coast Guard cutter on Saturday detained a Chinese-flagged vessel on suspicion of illegal fishing using driftnets, the Coast Guard said in a news release Friday. Custody of the 164-foot fishing vessel, Run Da, has since been transferred to the Chinese government.

After a U.S. Coast Guard aircraft spotted the vessel last week, the crew on the 282-foot cutter Alex Haley responded. Both U.S. Coast Guard and Chinese Coast Guard members aboard the Alex Haley — which has its home port in Kodiak — boarded Run Da, where they found 80 tons of chum salmon and one ton of squid.

The Alex Haley and its 105 crew members are on a North Pacific multinational fisheries enforcement patrol. The crew detained the fishing vessel in international waters about 860 miles east of Hokkaido, Japan, for suspected illegal, unreported, unregulated fishing activity, the Coast Guard said.

Read the full story at the Anchorage Daily News

Tariff tango: Chinese seafood markets at risk as trade rhetoric escalates

June 20, 2018 — Last Friday U.S. and Chinese officials announced a bundle of tariffs, each targeting the other nation’s exports in what could become an all-out trade war.

President Donald Trump made an announcement early in the day imposing a 35 percent tariff on all Chinese goods containing “industrially significant technologies,” an estimated $50 billion worth of Chinese goods, calling the move an effort to boost domestic production.

More than 800 products, about $34 billion worth, will be subject to tariffs starting July 6. About 280 other exports will need to undergo a public comment period and will take effect later.

Later in the day of June 15, officials with the Ministry of Finance of the People’s Republic of China responded with the announcement of a retaliatory 25 percent tariff on various U.S. exports, including many seafood products. That 25 percent would be charged on top of existing tariffs.

“We are deeply disappointed in these retaliatory tariffs. There is no connection between the products targeted by the U.S. and the tariffs Beijing plans to impose on exported American seafood,” said John Connelly, president of the National Fisheries Institute.

Read the full story at National Fisherman

 

China tariffs threaten booming lobster business

June 20, 2018 — China’s proposed retaliatory tariffs on U.S. lobsters would have a crushing impact on Gloucester lobster exporters such Mortillaro Lobster Inc. and Intershell, likely pricing their lobsters and all others from the U.S. completely out of the most vibrant lobster market in the world.

“I think this is going to kill us,” said Vince Mortillaro of the Commercial Street lobster sellers that bears his family’s name. “We’re already dealing with the treaty Canada has with the European Union that allows them to sell their lobsters cheaper there. Now with this on top of it, forget about it.”

On Friday, China announced additional 25 percent tariffs on approximately 545 American exported products with a collective value of $50 billion and the seafood industry — particularly U.S. lobster harvesters, processors and sellers — was hit hard.

Those tariffs were in retaliation to U.S. import tariffs on Chinese goods announced earlier by President Donald Trump.

China said it is imposing new tariffs — set to go into effect July 6 — on about 170 U.S. seafood products worth approximately $1 billion.

While the number of seafood products represents about 31 percent of the total U.S. products affected by the new tariffs, it accounts for only 2 percent of the $1 billion value of all U.S. products facing additional 25 percent tariffs from the Chinese.

Read the full story at the Gloucester Daily Times

China is the biggest market for Alaska seafood exports. The tariff war is raising concerns.

June 19, 2018 — Alaska seafood is among the industries caught in the growing trade battle between the United States and China, and it’s not clear yet exactly what the outcome will be.

After President Donald Trump last week announced tariffs on $50 billion of Chinese goods, China responded by announcing tariffs of the “same scale and the same strength.” China said it would impose 25 percent tariffs on U.S. goods worth $50 billion.

On Monday, things escalated further when Trump responded by threatening China with tariffs on $200 billion of goods.

Alaska’s seafood industry officials and members of the state’s congressional delegation said they were concerned about the tariffs at a time when the state is trying to strengthen ties with China, its largest trading partner and the biggest market for Alaska seafood exports.

“While there are many unknowns as to the impacts of these newly announced tariffs, I urge President Trump to work towards a trade policy with China that protects these critical markets for our seafood industry,” Sen. Lisa Murkowski, R-Alaska, said in emailed statement.

Read the full story at the Alaska Daily News

 

China to slap tariffs on Alaska seafood, among other U.S. products

June 18, 2018 — The United States today released a list of Chinese goods worth $50 billion on which it will place 25 percent tariffs. Shortly afterward, China announced reciprocal tariffs on U.S. goods, including Alaska seafood.

Garett Evridge, an economist with the McDowell Group, who specializes in the seafood industry, explained that the tariff on seafood is likely to be far reaching.

“Our initial review of this is indicates that really all salmon species, pollock, ground fish, herring, really across the board for Alaska seafood products, in addition to lobster and other products used throughout the U.S., it looks like the announcement indicates that tariff would be 25 percent on product, including Alaska seafood products,” said Evridge.

Both U.S. and Chinese tariffs will reportedly take effect July 6. Evridge said it is too early to know what this will mean for the seafood market.

“There’s a whole other side of this with diplomacy and strategy on the side of China and the U.S. that we’re not really aware of. But in the event that this actually occurs, it will certainly be a challenge to the industry, and it will impact processors, communities, fishermen just because a 25 percent tariff means an increase in cost.”

One thing is clear, however. China plays a major role Alaska’s seafood industry, so the tariffs would affect a significant portion of the market.

Read the full story at KDLG

China threatens tariffs on US lobsters as business booms

June 18, 2018 — A set of retaliatory tariffs released by China on Friday includes a plan to tax American lobster exports, potentially jeopardizing one of the biggest markets for the premium seafood.

Chinese officials announced the planned lobster tariff along with hundreds of other tariffs amid the country’s escalating trade fight with the United States. China said it wants to place new duties on items such as farm products, autos and seafood starting on July 6.

The announcement could have major ramifications for the U.S. seafood industry and for the economy of the state of Maine, which is home to most of the country’s lobster fishery. China’s interest in U.S. lobster has grown exponentially in recent years, and selling to China has become a major focus of the lobster industry.

“Maine’s lobster industry is an irreplaceable piece of our state’s economy that supports thousands of jobs and entire coastal communities,” the state’s congressional delegation said in a statement. “Just two weeks ago, the Maine delegation heard directly from our state’s lobster industry about the economic hardship a trade war with China would cause them.”

The delegation — Republican Sen. Susan Collins, Independent Sen. Angus King; Democratic Rep. Chellie Pingree and Republican Rep. Bruce Poliquin — said they plan to outline their concerns to federal trade officials.

“Hopefully cooler heads can prevail and we can get a solution,” said Matt Jacobson, executive director of the Maine Lobster Marketing Collaborative. “It’s a year round customer in China. This isn’t good news at all.”

Read the full story at the Associated Press

New England Fishermen Worry About Trade Dispute With China

June 18, 2018 — New England fishermen could be caught in the middle of the escalating trade dispute between the United States and China.

In response to Trump administration tariff threats, China is planning its own 25 percent tariff on more than 500 U.S. products, including seafood.

Latest numbers from the Massachusetts Division of Marine Fisheries put the value of seafood caught in Massachusetts in 2016 at $551 million.

But Chatham’s Doug Feeney says small boat fishermen like him are already hurting. He’s been traveling to China to try to expand his market.

Read the full story at WBUR

China hikes tariffs on US soybeans, electric cars, fish

June 18, 2018 — China fired back Saturday in a spiraling trade dispute with President Donald Trump by raising import duties on a $34 billion list of American goods including soybeans, electric cars and whiskey.

The government said it was responding in “equal scale” to Trump’s tariff hike on Chinese goods in a conflict over Beijing’s trade surplus and technology policy that companies worry could quickly escalate and chill global economic growth.

China “doesn’t want a trade war” but has to “fight back strongly,” said a Commerce Ministry statement. It said Beijing also was scrapping agreements to narrow its multibillion-dollar trade surplus with the United States by purchasing more American farm goods, natural gas and other products.

The United States and China have the world’s biggest trading relationship but official ties are increasingly strained over complaints Beijing’s industry development tactics violate its free-trade pledges and hurt American companies. Europe, Japan and other trading partners raise similar complaints, but Trump has been unusually direct about challenging Beijing and threatening to disrupt such a large volume of exports.

“In this trade war, it’s the U.S. who is playing the role of provocateur, while China plays defense,” said the Global Times, a newspaper published by the ruling Communist Party. “China is a powerful guardian and has enough ammunition to defend existing trade rules and fairness.”

Beijing will impose an additional 25 percent tariff starting July 6 on 545 products from the United States including soybeans, electric cars, orange juice, whiskey, lobsters, salmon and cigars, according to the Ministry of Finance.

Read the full story from the Associated Press at Boston.com