ASMI might think about redirecting marketing funds and emphasis away from China
Alaska seafood industry set to suffer from Chinese tariffs
Monday, July 09, 2018, 00:00 (GMT + 9)
ANCHORAGE (KTUU) — The Alaska seafood industry looks to be the local sector hardest hit by a 25 percent tariff imposed by the Chinese government on Friday, and the trade war could also add hundreds of millions of dollars to the cost of the proposed Alaska natural gas pipeline for export to China.
"The only species and products exported to China not affected are fresh fin fish like fresh salmon, fish meal and fish oil," said Tonkovic.
Alexa Tonkovic, executive director of the Alaska Seafood Marketing Institute (ASMI), says the tariffs will impact all frozen fin fish including salmon, pollock, cod, rockfish, king crab, snow crab and Dungeness crab.
Despite the widespread tariffs, less than half of the Alaskan seafood industry’s $1 billion relationship with China is currently set to be impacted by the tariffs. "It is important to note that the majority of the product from Alaska to China is for reprocessing and for re-export,” said Tonkovic.
Garrett Evridge, an economist with the McDowell Group that has ASMI as a client, says that China performs a lot of manually intensive tasks such as deboning or breading high-volume fish such as Pollock, pink salmon and cod.
The Alaska industry would simply not be competitive on a global stage if the same tasks were performed in a higher-cost labor market like the United States, explained Evridge.
Currently though there are multiple unknowns about how the tariffs will function. In some instances, Tonkovic explained, a country’s customs enforcement will know to exempt a product from a tariff.
But not always. “Sometimes when a product is exempt from a tariff, the cost is paid from when a product lands and then once it’s re-exported, it’s re-credited back,” said Tonkovic.
Meaning U.S. and Chinese companies can face a “significant financial burden” while waiting to get repaid for the cost of the tariff, even when the product is officially exempt from its restrictions. (...continue)
Source: By Sean Maguire / www.ktuu.com | Read full story here