Alaskans fret as Chinese, US tariffs go into effect

The next phase of the Chinese-U.S. trade war kicked into effect on Friday, 6 July, as each country imposed USD 34 billion (EUR 28.9 billion) worth of tariffs on a range of goods that, on the Chinese side, include a variety of seafood products.

According to a list issued from the Ministry of Finance of the People’s Republic of China, more than 170 seafood products are subject to the new tariffs, which went into effect at 12:01 a.m. on 6 July. However, confusion remains as to exactly which products are subject to the tariffs – especially amongst those engaged in sending seafood to China for reprocessing and re-export.

That’s a big question for many involved in the seafood industry in Alaska, which relies heavily on Chinese labor to complete the difficult task of removing pinbones from much of its catch. In fact, in large part due to the seafood industry, China is Alaska’s largest trading partner, with hundreds of millions of dollars’ worth of salmon, flatfish, and cod heading to China for reprocessing and re-export.

Glenn Reed, president of the Pacific Seafood Processors Association, which represents companies operating onshore processing plants for Alaska salmon, crab, and pollock, as well as Pacific cod, said there is still uncertainty on the issue.

“We’re watching the situation closely. We know we this could affect us all from fishermen, processors, support business, communities, the state, etc. We just don’t have good info at this point,” he told SeafoodSource via email. “We may not know the impact until after 6 July.”

Similarly, Chris Woodley, the executive director of The Groundfish Forum, a group that includes companies harvesting and processing Pacific cod, yellowfin sole, rock sole, and Atka mackerel, said he had heard the reprocessing and re-export sector was not subject to the new tariffs, though he wasn’t completely sure. 

Woodley and others sending seafood products to China received a letter from John Henderschedt, the director of NOAA Fisheries Office of International Affairs and Seafood Inspection, stating that reprocessed products are not subject to tariffs. That would be big news for the companies Woodley represents, as 84 percent of the yellowfin sole and 85 percent of the rock sole they harvested was sent to China in 2017.

In an email, Henderschedt confirmed to SeafoodSource that some fishmeal products and all imports of U.S. seafood that is processed in China for re-export are not affected.

“In consultation with Embassy Beijing, NOAA Fisheries has confirmed that [those] products are not subject to the additional 25 percent tariff recently announced by the Chinese government” Henderschedt said. “Affected U.S. seafood exports arriving at Chinese ports on 6 July or later will be subject to the new tariff rate.”

However, reprocessed and re-exported products represents just half of the approximately USD 1 billion (EUR 851 million) in seafood products Alaska sends to China annually, according to the Alaska Seafood Marketing Institute (ASMI). Most of the assorted fish and shellfish – including frozen pollock, cod, snow crab, Dungeness crab, and herring – exported from Alaska to China for direct consumption, with a total value of around USD 500 million (EUR 425 million), will be subject to the new tariffs. ASMI Executive Director Alexa Tonkovich said in a statement that her organization is working alongside other U.S. seafood industry trade groups and its own China office to evaluate the situation. 

In testimony in front of the U.S. Senate in late June, U.S. Commerce Secretary Wilbur Ross said the federal government will provide assistance to people hurt by tariffs, but did not go into details. Tonkovich said even if those Alaskans affected by the tariffs receive some form of government help, she fears the ramping up of trade barriers will cause serious damage to the Alaska Seafood brand’s presence in China, which ASMI has marketed for more than 20 years. 

“Any time something like this happens, you lose ground,” Tonkovich told Bloomberg News. “It’s been a slow process to gain the good ground that we have in China.”

Woodley told SeafoodSource his group is now engaged in an effort to inform lawmakers about the effects of the tariffs on their members.

“What we’re doing right now, at least in our sector, is trying to provide decision-makers, including congressional offices as well as NOAA leadership, with information regarding the value and the volume of these species that are being exported,” he told SeafoodSource. “We’re just making sure people understand this is really a critical part of the seafood trade, and  if these tariffs get expanded to include these aspects, we think it could have a significantly damaging impact on the flatfish sector.”

All three members of Alaska’s congressional delegation have issued statements opposing the tariffs. Republican U.S. Senator Lisa Murkowski said she is very concerned about the impact of the Chinese tariffs on Alaska’s economy.

“It’s imperative that our seafood industry, one of the economic drivers of our state, has the ability to continue competitively exporting their products all over the world,” she said. Murkowski added she is urging Trump to work toward a trade policy with China “that protects these critical markets for our seafood industry.”

Republican Representative Don Young said the Alaska delegation had sent a letter to U.S. President Donald Trump asking him to exempt Alaska’s seafood from ongoing trade battles with China.

“The recent tariff announcement from China is very concerning for Alaska and our fishermen. Commercial fisheries help sustain remote coastal communities and create thousands of jobs in the state which generates billions of dollars for both local and national economies,” Young said in a statement. “The success of this industry allows Alaska to be a leader in global markets. I have always been a strong supporter of our robust fishing industry and I will continue to work with the Administration to ensure that the Alaskan seafood industry is protected.”

Republican U.S. Senator Dan Sullivan questioned the Trump administration’s trade strategy, saying the president’s approach to trade policies is “concerning.”

“The Trump administration’s trade policies seem to lack both strategic coherence and an end game. I will continue to press these concerns with the President and his Administration,” Sullivan said. “A tit-for-tat trade war between the United States and China will negatively impact both countries. But, in many ways, we’ve been in a trade war with China for years, as they continue to engage in unfair and nonreciprocal trading practices that harm American workers, including those in Alaska’s fishing industry.”

Photo courtesy of China Daily