SEAFOOD DEFICIT

There’s something fishy about the US’s new $200 billion tariff list for China

Expressing annoyance over China’s decision to retaliate against $34 billion in US tariffs—rather than contritely mend its ways—the US is moving forward with plans to put duties on another $200 billion in goods.

The Office of the United States Trade Representative said July 10 that it had come up with a list of $200 billion worth of goods on which it would charge a new 10% tax. The 195-page list (pdf) includes a huge variety of products—from buttons and handbags, to minerals and rocks that share their names with certain US publications—including nearly nine pages devoted to fish and seafood products of a bewildering variety. For example, brined tilapia, trout fillets frozen in blocks, and caviar.

The inclusion—which is not final and will go through a comment period in late August—is likely a nod to both China’s decision to put a 25% tax on US seafood last week as part of its retaliatory measures and to the “pet peeve” of a White House administration official who has often railed about the US’s seafood trade deficit (which is about $11 billion). “I hate the idea that with all the water surrounding us and all the water inland that we have a trade deficit in fish,” US commerce secretary Wilbur Ross told Congress in March, according to trade web site SeafoodSource.

So how bad is the seafood trade deficit with China?

The US’s seafood trade deficit with China stands at roughly $1.5 billion. The Canada-US seafood deficit is bigger, at about $2.3 billion.

China exported $2.7 billion in seafood to the US in 2017, according to the National Marine Fisheries Service, while importing about $1.2 billion. The US imports tons of frozen shrimp, frozen fish fillets, tuna, canned bonito, crabmeat—and even some $7 million of Chinese caviar.

While there is a gap, Chinese demand for US fish products has been increasingly steadily with rising affluence, as Maine lobstermen have found.

As the US Department of Agriculture noted in December (pdf, p. 16), “China has transformed from being primarily a seafood processing hub to a seafood-consuming country with its own strong domestic demand.” It added that mistrust among high and middle-income consumers of domestic seafood, particularly when buying for children, was creating demand for imports.

Speaking of seafood processing, some of the fish imported into the US from China is actually US in origin and being re-imported after handling (yes, supply chains are complex).

In imposing its 25% tariffs on US seafood last week, China excluded seafood that was ultimately headed back overseas again. But now US dinner tables could be hit by their own government’s tariffs.

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