America’s Seafood Industry Getting ‘Crushed’ by High Tariffs and Inflation

US fish hit with duty going into China to be processed and then again when it arrives back for sale on these shores

A commercial salmon fishing vessel in Alaska. Watershed Watch Salmon Society

Fishermen are catching a lot more than seafood in their nets this year due to ongoing tariffs resulting from the U.S.-China trade war and sky-high inflation. The resultant effect has crippled the majority of America’s seafood industry by making it less competitive.

Much of this is due to the amount of offshore processing done in China after the fresh catch is scooped up out of U.S. waters. The duty rates affect multiple varieties of fish, like salmon, tilapia, and tuna, along with shellfish species like crab and shrimp.

For more than a decade, America has been sending its bountiful ocean harvest overseas to China for processing due to cheaper labor and operation costs.

Of the estimated 6.3 billion pounds of seafood Americans consume annually, upwards of 65 percent of that is reimported back into the country.

The move saved U.S. companies about 80 cents per pound of fish in labor costs. With roughly 30 million pounds of salmon alone being sent to China for processing—that’s just from one U.S. supplier—the savings add up quickly.

However, offshore processing became a painful lesson in 2018 when the United States initiated a 25 percent duty tax on Chinese imports. Beijing retaliated the same year by slapping hefty tariffs on 128 American imports. Many of these are grocery items, including seafood.

Some seafood shipments are being hit with duty rates up to 45 percent.

The industry’s trawlers—launching from picturesque harbors over the past decade—represent 1.8 million jobs, $255 billion in sales, and $117 billion in value-added impacts.

But higher seafood prices have forced some U.S. suppliers to turn to more affordable Russian fish imports since 2018.

Russia is a leading global producer of seafood and the fifth largest wild-caught fish producer. It is a major exporter of pollock, which is used in products like fast food sandwiches and fish sticks.

In 2021, the United States imported $1.2 billion worth of Russian seafood products.

Offering cheaper prices on multiple species of whitefish and other fresh catch, Russia has become a major competitor for U.S. domestic seafood.

In March, President Joe Biden banned Russian seafood imports as part of the sanctions package against Moscow for its invasion of Ukraine in February.

Yet some experts say Russian fish is still finding its way onto U.S. dinner plates this year through China’s booming re-export business.

A worker uses a knife to fillet a salmon in a supermarket in Northern California. Justin Sullivan/Getty Images

Compounding this is inflation this year. Seafood has outpaced other grocery products on inflated price tags, hitting an almost 17 percent increase as of July.

Financial expert and CEO of The Smart Investor, Baruch Silvermann, told The Epoch Times soaring inflation is taking a toll on all industries, including America’s fishing and seafood.

“This is particularly noticeable in exports as the dollar is stronger against other currencies. Since the dollar is stronger, it means that exports are less competitive and demand may continue to be weak,” he explained.

“For example, while one euro may have provided $1.20 last year, now, it is providing less than $1. This is a potential drop in profits of 20 percent,” Silvermann noted.

When it comes to imports and exports, Salvatore “Sal” Stile II knows his way around the yard. He’s the president of the Valley Stream-based shipping and customs clearance company Alba Wheels Up International in New York.

Stile says America’s fishing industry is “absolutely getting crushed” by a combination of tariffs, inflation, and port logistics.

“Basically, it works both ways. The China tariffs are impacting American fisheries because most American fish is sent to China for processing,” Stile told The Epoch Times.

After paying import duties upon arrival to China, American seafood is then returned for sale after processing. Once it reaches U.S. shores again, the fish becomes subject to a second tax.

And while consumers are seeing some of that cost burden in grocery stores, the vast majority is absorbed by industry workers.

“Our fishermen are fishing off small family owned vessels here in the North Pacific. The cost of fuel, bait, ice, and transportation costs are astronomical,” James Johnson, executive director of the Deep Sea Fishermen’s Union of the Pacific, told The Epoch Times.

The union is the oldest of its kind in the United States—founded in 1912—and claims the distinction of being the only U.S. maritime union that represents the concerns of crewmen.

Inflation and tariffs aside, Johnson explained the overhead and operating costs for boat crews are extremely high to begin with.

“And then what proceeds are left are paid back to the crew and if there’s any profit at the end then it’s divided by the crew and the ownership.

Fishing is kind of like a weird model,” he said.

“Every fisherman is an independent contractor, they’re not employees ... so they bear a lot of the cost and responsibility directly. So I think when we see the cost of inflationary pressures it’s because it’s borne by the fishermen.”

Exacerbating this are ongoing logistical complications at maritime terminals.

The Parking Problem

According to Stile, even when American fishermen have the opportunity to sell their products, they face hurdles like long wait times, lack of space, and skipped ports of call.

Lack of container space and congestion in U.S. ports garnered attention since the onset of the pandemic due to reduced operating capacity and the ability to export or receive containers from overseas.

The situation has improved some this year, but the same challenges remain.

Stacked containers as ships unload their cargo at the Port of Los Angeles on Nov. 22, 2021. Mike Blake/Reuters

“Some ports on the west coast are still suffering this issue. Some are not only skipped; empty containers aren’t being put back on the ships,” Stile explained.

The space availability dilemma for empty containers in American ports creates a chain reaction that also impacts the struggling seafood industry. Stile explained the empty container problem works, in essence, just like a parking garage.

“If you don’t have enough cars coming out, you can’t park.”

The empty container debacle also gets expensive fast, leading to canceled stops altogether to avoid heavy “detention” fees.

“You’re being charged for the unreturned containers. I had one client that couldn’t return containers, it cost him tens of thousands of dollars,” he said.

Keeping It Local

While commercial fishing largely suffers from high tariffs, the roughly 35 percent of the industry that keeps its production local isn’t experiencing any China-U.S. trade fallout.

Up in Alaska, fishing is as much a part of life as scenic mountain vistas and grizzly bears.

As of 2020, the fishing industry generated more than $13 billion annually in economic output for the state and employs nearly 100,000 people full-time. That amounts to almost 14 percent of Alaska’s population.

Charlene Jones drives a propane truck in the city of Haines, which is located along the stunning and isolated Lynn Canal in the southeastern coastal region. When asked how important the fishing industry is in her area, Jones told The Epoch Times, “It’s critical.”

Fish wheel near Haines, Alaska on Sept. 29, 2022. Courtesy of Charlene Jones

Haines is the kind of place where local mom-and-pop stores line the streets and self-reliance is a way of life.

There’s not a single “golden arch” or brand name gas station in sight.

Moreover, the town also isn’t getting crushed by tariffs since their seafood processing is done in town and sold for local consumption.

“Haines Packing handles all the commercial fish locally,” Jones said.

Serving other coastal cities like Skagway and Whitehorse, Haines Packing has effectively shielded the city’s local seafood industry from international duty taxes since 1917.

By contrast, Kodiak is the hub of Alaska’s commercial fishing and is the third largest fishing port in the United States. More than 40 percent of salmon, 54 percent of cod, and a third of all seafood in the state are exported to China annually.

Though local or exported, fishing is still a tricky industry in Alaska.

“I know maybe 10 people who are commercial fishermen and that’s what they do, but it only exists in the summer. It’s a seasonal thing.”

Jones admits “It’s hard to find a job that pays your bills consistently.”

Though despite the success of keeping seafood local in Haines, Stile says it’s unlikely America’s seafood industry could bring commercial processing in-house on a larger scale.

“Between OSHA laws, labor, warehousing facility costs, it’s just not possible,” he said.