Welcome   Sponsored By
Subscribe | Register | Advertise | Newsletter | About us | Contact us
   


How Effective Have China’s Seafood Tariffs Been? Lobster case

Click on the flag for more information about United States UNITED STATES
Wednesday, April 08, 2020, 06:30 (GMT + 9)

There is a case that viruses (bird flu, swine fever, and now the coronavirus) have had almost as big an impact on Chinese-American agricultural trade as the trade war. (And more than most want to know on trade in crustaceans)

China has a reputation for responding to tariffs—even ones introduced by countries following the rules—with retaliatory tariffs of its own. And its favorite targets have long been America’s agricultural (and seafood) exports.

The actual impact of the tariff though isn’t always quite as clear as many think—tariffs of course reduce direct trade, but their impact on direct trade can be a poor measure of their actual impact.

In some cases, the workarounds have turned out to be pretty easy.The real impact depends on how easy it is for markets to adjust to the tariff. What are the workarounds? Can alternative markets be found? 

Now consider one of the more prominent—at least judging by the press coverage—industries that has been hit by Chinese retaliatory tariffs in the recent trade war: lobster. 

The fall in U.S. lobster exports to China generated stories in the Atlantic, in the Washington Post, and on PBS. And in Bloomberg too of course.

But there are, in fact, markets other than China for U.S. lobsters, and suppliers other than the United States for China. Given the large two-way trade in lobsters between the United States and Canada, the obvious adjustment would more or less be “Canada exports more lobster to China, and the U.S. exports more lobster to Canada/imports fewer lobsters from Canada.”

That’s what some lobster industry folks believe happened: “Lobster from Maine is coming into Canada and being exported to China,” says Geoff Irvine, executive director of the Lobster Council of Canada. “Everybody knows what’s happening”.

And it is a story that is reasonably well backed up in the data. Over the last two years, the “peak” in U.S. lobster exports (dollar value) to Canada rose by just under $50 million (using a trailing 3M sum). That’s roughly equal to the somewhat larger than $50 million drop off in “peak” lobster exports to China.*

As a result, China’s tariff on U.S. lobster exports didn’t have much of an impact on total U.S. lobster exports back in 2018—the bigger fall in dollar value of U.S. lobster exports came from 2014 to 2016, before the tariffs.

The story in 2019 is more complicated. 

The Maine lobster harvest was both late and small.

As a result, prices were on the high side last year—even without direct exports to China. The Portland Press Herald noted, "The average per-pound price in 2019 was a whopping $4.82, the highest since Maine began tracking lobster hauls in 1880."

That kept the dollar value of the catch up. And because of the smaller and later U.S. harvest, the United States reduced its exports to Canada a bit even as exports to China continued to fall. 

And more importantly, the United States started importing a lot more Canadian lobsters. American consumers in fact were competing with China for Canada's limited supply.

That may be a sign of thing to come if the Gulf of Maine continues to warm.

Now the coronavirus has really shut down the lobster trade—Canadian exports to China have slowed, as the virus has reduced demand from restaurants (and it also has reduced the flights that take Canadian and bootlegged American lobsters to China). Lobster prices are down, even with the “phase 1 deal.”

Of course, experts in agricultural trade know that the really big dollars aren’t in meat and seafood. The bulk of trade traditionally has been in animal feeds—and specifically in soybeans.

Soybeans wouldn’t normally be considered a good trade war target.

Soy, after all, is a commodity—Brazilian beans and U.S. beans are pretty close substitutes. And in many cases, commodity trade can sort of roll around the tariff with out much global impact.

Yet there is no doubt that China’s tariff on soy did have an impact. China reduced not just U.S. soybean exports to China in 2018, but U.S. soybean exports globally.

But it is worth noting the extreme measures China took to achieve this result.

The U.S. harvest usually ships out in the fourth quarter. China usually buys about two-thirds of the crop then. In the fall of 2018 China—through tariffs, but also through its control over state-owned oilseeds importing companies (COFCO and Sinograin) and its control over licensing for smaller private importers –brought its imports of U.S. soy down to zero.

That boycott during the normal buying season was so powerful that it led U.S. beans to trade at a discount in the global market, which is pretty clear evidence of impact. The distortions in the market were so large that the United States was even briefly shipping ‘beans to Argentina so that Argentina’s crushers could crush U.S. beans into soymeal to supply their traditional markets while freeing up uncrushed Argentine beans for China (China likes to do its own crushing).

I am sure the Trump administration got the message. It was a clear demonstration that China knows how to manage a big portion of its trade.

The lessons here—

  • When China is a big enough buyer, it can have a big impact even on commodity markets. Soybeans for example. Especially in sectors where China’s state controls the firms doing the bulk of the actual importing, and it can enforce a full boycott.
  • When China is a more marginal buyer, the impact of tariffs is likely to be smaller, particularly if there are obvious ways of getting around the tariffs.
  • Consequently, stories and studies that look only at the bilateral data can overstate the actual impact of retaliatory tariffs.
  • And biology—bird flu and swine fever—has had a large impact on Sino-American agricultural trade even before the coronavirus disrupted all trade.

* The peak in shipments to China actually comes a few months after the peak in exports to Canada. That would suggest that China imports a lot of frozen lobster, which runs a bit against the anecdotes on the “live” trade.* 

Author: Brad W. Setser/cfr.org

editorial@seafood.media
www.seafood.media


 Print


Click to know how to advertise in FIS
MORE NEWS
Japan
Mar 29, 18:30 (GMT + 9):
IN BRIEF - Frozen volume of salmon and trout, both lower than the previous year. Salmon coho Fall
China
Mar 29, 07:40 (GMT + 9):
Southeast Pacific Squid Index: Giant squid (dosidicus gigas)
Canada
Mar 29, 07:10 (GMT + 9):
Cooke Aquaculture Named One of Atlantic Canada’s Top Employers
Indonesia
Mar 29, 07:00 (GMT + 9):
IN BRIEF - EFishery acquihires Indonesian AI-powered IoT startup, to launch AI brand
France
Mar 29, 07:00 (GMT + 9):
Other Media | The Fishing Daily: French Minister Urges Dialogue Over UK Expansion of Marine Protected Areas
Thailand
Mar 29, 07:00 (GMT + 9):
Thai Union Collaborates to Achieve Zero Wastewater Discharge and Establish an Industry Learning Center
Russian Federation
Mar 29, 07:00 (GMT + 9):
Russia and China Combat Illegal Fishing: Electronic Certificates of Legality for Catches
United Kingdom
Mar 29, 07:00 (GMT + 9):
Brexit costs Scotland up to USD 126.09 million-a-year in lost salmon exports
French Guiana
Mar 29, 06:00 (GMT + 9):
IN BRIEF – 'The French vessel that is to come to patrol Guyana’s waters, saving the country $100M through illegal fishing, is yet to dock here'
Japan
Mar 29, 03:00 (GMT + 9):
Driftnet fishing for salmon and trout starts early. Agreement with Russia
Russian Federation
Mar 29, 01:00 (GMT + 9):
Will the Russian Far East be the country with the most snow crabs in 2025?
Viet Nam
Mar 29, 01:00 (GMT + 9):
Shrimp exports from Ecuador are facing many challenges
Japan
Mar 29, 00:50 (GMT + 9):
IN BRIEF - Faced with the Peruvian decline, fishmeal production in India and Oman is increasing rapidly
Australia
Mar 28, 21:10 (GMT + 9):
IN BRIEF - At WTO, Australia seeks details on India's fisheries plan
Croatia
Mar 28, 21:00 (GMT + 9):
IN BRIEF - Cromaris business results in 2023



Lenguaje
FEATURED EVENTS
  
TOP STORIES
Clipfish challenges in Brazil: Port bureaucracy stops millions worth
Brazil More and more clipfish containers are being stopped in Brazilian ports. - Complicated regulations make market access challenging, to say the least, say Norwegian exporters who risk large losses. Bra...
Catches in the Sea of Okhotsk and Bering Sea
Russia Fed. Situational update as of 03/24/2024 Source: Stockfile FIS Sea of Okhotsk (pollock) According to OSM data in the Sea of Okhotsk, pollock catch (industrial and coastal fisheries) as of March 24, 20...
Productive Development of the Fishing Activity
Peru Fishing Sector Bulletin - January 2024 The landing of hydrobiological resources registered a negative interannual variation of 62.7%, as a result of the lower landing of fishing resources for indirec...
NGO Sues UK Government Over International Fishing Quotas
United Kingdom Blue Marine Foundation, a charity dedicated to restoring the ocean to health, has launched legal proceedings over the government’s decision to set fishing opportunities, for more than half UK st...
 

Maruha Nichiro Corporation
Nichirei Corporation - Headquarters
Pesquera El Golfo S.A.
Ventisqueros - Productos del Mar Ventisqueros S.A
Wärtsilä Corporation - Wartsila Group Headquarters
ITOCHU Corporation - Headquarters
BAADER - Nordischer Maschinenbau Rud. Baader GmbH+Co.KG (Head Office)
Inmarsat plc - Global Headquarters
Marks & Spencer
Tesco PLC (Supermarket) - Headquarters
Sea Harvest Corporation (PTY) Ltd. - Group Headquarters
I&J - Irvin & Johnson Holding Company (Pty) Ltd.
AquaChile S.A. - Group Headquarters
Pesquera San Jose S.A.
Nutreco N.V. - Head Office
CNFC China National Fisheries Corporation - Group Headquarters
W. van der Zwan & Zn. B.V.
SMMI - Sunderland Marine Mutual Insurance Co., Ltd. - Headquarters
Icicle Seafoods, Inc
Starkist Seafood Co. - Headquearters
Trident Seafoods Corp.
American Seafoods Group LLC - Head Office
Marel - Group Headquarters
SalMar ASA - Group Headquarters
Sajo Industries Co., Ltd
Hansung Enterprise Co.,Ltd.
BIM - Irish Sea Fisheries Board (An Bord Iascaigh Mhara)
CEFAS - Centre for Environment, Fisheries & Aquaculture Science
COPEINCA ASA - Corporacion Pesquera Inca S.A.C.
Chun Cheng Fishery Enterprise Pte Ltd.
VASEP - Vietnam Association of Seafood Exporters & Producers
Gomes da Costa
Furuno Electric Co., Ltd. (Headquarters)
NISSUI - Nippon Suisan Kaisha, Ltd. - Group Headquarters
FAO - Food and Agriculture Organization - Fisheries and Aquaculture Department (Headquarter)
Hagoromo Foods Co., Ltd.
Koden Electronics Co., Ltd. (Headquarters)
A.P. Møller - Maersk A/S - Headquarters
BVQI - Bureau Veritas Quality International (Head Office)
UPS - United Parcel Service, Inc. - Headquarters
Brim ehf (formerly HB Grandi Ltd) - Headquarters
Hamburg Süd Group - (Headquearters)
Armadora Pereira S.A. - Grupo Pereira Headquarters
Costa Meeresspezialitäten GmbH & Co. KG
NOAA - National Oceanic and Atmospheric Administration (Headquarters)
Mowi ASA (formerly Marine Harvest ASA) - Headquarters
Marubeni Europe Plc -UK-
Findus Ltd
Icom Inc. (Headquarter)
WWF Centroamerica
Oceana Group Limited
The David and Lucile Packard Foundation
Ajinomoto Co., Inc. - Headquarters
Friosur S.A. - Headquarters
Cargill, Incorporated - Global Headquarters
Benihana Inc.
Leardini Pescados Ltda
CJ Corporation  - Group Headquarters
Greenpeace International - The Netherlands | Headquarters
David Suzuki Foundation
Fisheries and Oceans Canada -Communications Branch-
Mitsui & Co.,Ltd - Headquarters
NOREBO Group (former Ocean Trawlers Group)
Natori Co., Ltd.
Carrefour Supermarket - Headquarters
FedEx Corporation - Headquarters
Cooke Inc. - Group Headquarters
AKBM - Aker BioMarine ASA
Seafood Choices Alliance -Headquarter-
Austevoll Seafood ASA
Walmart | Wal-Mart Stores, Inc. (Supermarket) - Headquarters
New Japan Radio Co.Ltd (JRC) -Head Office-
Gulfstream JSC
Marine Stewardship Council - MSC Worldwide Headquarters
Royal Dutch Shell plc (Headquarter)
Genki Sushi Co.,Ltd -Headquarter-
Iceland Pelagic ehf
AXA Assistance Argentina S.A.
Caterpillar Inc. - Headquarters
Tiger Brands Limited
SeaChoice
National Geographic Society
AmazonFresh, LLC - AmazonFresh

Copyright 1995 - 2024 Seafood Media Group Ltd.| All Rights Reserved.   DISCLAIMER