Trump’s trade war now includes tariffs on seafood going to and from China.
China is Alaska’s biggest seafood buyer, purchasing 54 percent of Alaska seafood exports last year valued at $1.3 billion. On July 6, a 25 percent tariff went into effect on U.S. imports to China, including all Alaska salmon, pollock, cod, herring, flatfish, dungeness crab, sablefish, geoduck clams and more.
Then on July 11 Trump added a 10 percent tariff on all seafood sent from China to the U.S.
According to market expert John Sackton of Seafoodnews.com, it includes products that are reprocessed in China and sent back for distribution in this country.
The total value of the 291 seafood products China sends to the U.S. each year is $2.75 billion. Sackton called the 10 percent tariff “a $275 million dollar direct tax on Americans.”
It will hit 70 percent of imports of frozen cod fillets. Likewise, 23 percent of all frozen salmon fillets come into the U.S. from China, including pink salmon that is reprocessed into salmon burgers and fillets.
Trade data show that China represents 47 percent of U.S. breaded shrimp imports and 37 percent of frozen squid imports. China also supplies 20 percent of the U.S. frozen scallop market.
Sackton said the economic hit will go far beyond the $275 million.
“As sellers are forced to raise prices, competitive products from other countries will follow suit, resulting in across the board seafood price increases. That will discourage seafood buying so sellers will lose business as customers back away,” he added.
China has been the fastest growing global market for high-end seafood. Last month Governor Walker led a trade mission to China with several Alaska seafood companies which have spent millions to expand their brand even more.
“All this money will go up in smoke,” Sackton said.
In recent years, Alaska seafood sales to China have increased by millions of dollars through eCommerce activity, said Hannah Lindoff, international program director for the Alaska Seafood Marketing Institute.
Lindhoff said ASMI will try to expand sales to other markets, such as Brazil, Spain and Ukraine. But, as Sackton points out, it is more expensive to mount campaigns in multiple countries than in a single large market like China.
ASMI operates on a shoestring international budget of less than $7 million a year, mostly from grants and federal dollars. Its overall budget is about $22 million, nearly all from processor taxes.
Trump’s seafood tariffs come at a time when the Alaska legislature has zeroed out the state’s $1 million dollar contribution to ASMI.
Compare that to Norway’s more than $50 million marketing budget from a small tax on its seafood exports.
Meanwhile, the Associated Press reported on Thursday that “scant” American fish or shellfish was for sale at Jingshen, Beijing’s largest wholesale seafood market, which supplies restaurants and grocers across China. Several distributors said that the recent 25 per cent tariff has made American seafood unaffordable.
Unless Congress intervenes, the additional 10 percent will take effect in September. Alaska’s delegation has yet to comment.
Boats already are signing up to participate in fall Bering Sea crab fisheries that begin October 1. Meanwhile, many crabbers are still awaiting word on what their pay outs are for last season.
Prior to the crab fisheries changing from “come one, come all” to a catch share form of management in 2005, prices were set before boats headed out, said Jake Jacobsen, director of the Inter-Cooperative Exchange which negotiates prices for most of the fleet.
“Since then the price is based on the historical division of revenues and there is a formula that is applied to sales. It takes a long time for sales to be completed to the point where we know or can predict what the final wholesale prices will be, and then we can apply the formula to it,” he explained.
Prices to fishermen were down a bit from last year but historically very high, Jacobsen said. For snow crab and bairdi Tanners, which typically are hauled up after the start of each year, prices were just settled and won’t be made public for another week.
“Most of the snow crab and bairdi prices were over $4 a pound, so that’s very good,” he hinted.
According to processor data, last season’s average snow crab price was $4.07 a pound; Tanner crab averaged $3.33. For golden king crab, fishermen averaged $5.51 per pound.
For Bristol Bay red king crab, the price averaged $9.20 a pound last year, down from the record $10.18 in 2016.
Heading into the fall, Jacobsen said the price outlook is good.
“We expect king crab to be very high this year. There is quite a bit of demand throughout the world and it’s in short supply,” he said, adding that a huge reduction in illegally caught crab imports from Russia has helped boost the market for Alaska crab.
2018 Anchorage Daily News