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24

09月

Sino-US Traiff

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China's seafood exports to the United States will be subject to a 10% tariff increase from September 24, 2018, and a 25% tax increase from January 1, 2018. Fish fillets of COD that imported, processed and re-exported from Alaska will be exempted, while wild salmon product is still on the tax list.


The 10% tariff is affordable to salmon processors and importers. Since the output of wild salmon in Alaska this summer reached the lowest average catch in nearly five years, the raw material quotation is unacceptable to Chinese processing plants. During this period, the tariff uncertainties of Sino-US trade wars were also encountered. Orders in the finished product market have been delayed, but with the U.S. tariff policy in place, 10% of the tariff will be borne by both importers and processing plants, and China's northern salmon processing plants are actively communicating with U.S. buyers, looking forward to signing more orders before the end of the year.

Given that wild salmon exports to the U.S. market will be subject to a 25% tariff increase after January 1, this could be a fatal blow to the seafood processing industry. Firstly, the processing plants are concentrated in Dalian, Yantai and Qingdao areas in northern China. As the profit of the seafood processing industry is getting lesser and lesser, the labor cost is increasing year by year, and influenced by the US tariff policy, the banks will shrink the credit line comprehensively and decline further mortgagees, so the enterprises will lack of  liquidity. China's wild fish processing plants will face more production cuts, shutdowns, and even bankruptcies. In the future, as Cambodia, Thailand and Vietnam take over wild salmon processing, China's processing industries are challenged.

In the short term, Sino-US trade war may bring benefits to Russian fisheries. Russian fisheries groups are expanding their scale. For many years, Russian exports of COD compete with American raw materials. Their prices have certain advantages. As Russia's largest fisheries company, Russian fisheries plans to build bigger and more cod ships and plans to build a processing plant in Vladivostok, will produce more fillets and surimi products to compete with Chinese processing plants.


Overall, China's processing plants in raw materials, finished products, capital chain do not have the same competitive advantage, coupled with some trade barriers restrictions, will have a greater impact on China's processing plants. For Chinese enterprises, how to go in the future, export to domestic sales, or the upstream and downstream of the industrial chain to do resource integration, we need to think about the issue urgently.