August 21, 2018

US-China tariff wars impacting the Alaskan seafood industry

As seafood products are included as one of the items on the list that will be affected once the US confirms increased tariffs from 10% to 25%, the Alaska Seafood Marketing Institute, a public-private marketing organisation promoting Alaska's seafood industry, responded with much disappointment.

The institute explained in a statement on its website that negative impacts from the Chinese tariffs are already showing from market analysis. China is Alaska's largest seafood trading partner, both for domestic consumption and for reprocessing.

"Tariffs will likely increase the cost of Alaska seafood products to Chinese consumers," the statement adds. "Depending on the species, the Alaska seafood products may not be cost-competitive with the additional tariff. Implementation of this tariff has already caused hiccups, delays and order cancellations. If the tariff stays in place, it could impact demand in China for Alaska seafood products. It could impact consumer sentiment towards US products and China may see other suppliers."

The tariffs significantly impact one main item: fishmeal. "Alaska exports about US$70 million of fishmeal to China every year," Garett Evridge, a seafood industry economist from McDowell Group, explained.

He added, "A lot of our fishmeal is used in aquaculture in China. To my understanding, it is not an edible product, so it is nearly exclusively used in the aquaculture realm."

Increased tariffs would mean Alaska's fishermen and processors stand an increased chance of being hit. If the fishes are not taxed upon entering China for domestic consumption and are shipped back to the US for local consumption, the fishes will be imposed with tariffs upon re-entering the country.

Recently, many processors have shifted from completing all the work in Alaska to sending out their fishes to be finished in China due to lesser labour costs, which is a common process according to Evridge. "Processors in Alaska have faced challenges in finding workers in recent years too," he explained.

"That's kind of a pattern with natural resources in Alaska," he said. "If you have the ability to send the product elsewhere that is already established, it can be more cost-efficient."

The Alaska Seafood Marketing Institute estimates that about US$2.7 billion of US seafood is processed in China and re-exported to the US annually. Most of that comes from Alaska, which leads the nation in total pounds of seafood landings.
 

Source: Peninsula Clarion