The latest round of tariffs implemented by the U.S. Trade Representative (USTR) targeted several countries that heavily produce salmon and shrimp with duty rates between 10 percent and 12.5 percent, leaving U.S. seafood importers with few options for relief from rising costs.
The 60 global economies hit with Section 301 tariffs include top salmon-producing countries such as Norway, Chile, and the U.K., as well as shrimp-producing nations like Ecuador, India, Indonesia, Vietnam, and Thailand.
Salmon and shrimp are a primary focus of Rancho Dominguez, California, U.S.A.-based distributor Santa Monica Seafood, with the two species representing approximately 50 percent of the volume sourced for many of its retail and foodservice customers.
As such, Santa Monica Seafood President and CEO Roger O’Brien asked the USTR before it made its final decision to exempt salmon and shrimp – not just for the sake of his firm but because the U.S. relies so heavily on imports to meet demand for the two species.
“These two categories are uniquely situated: They are the two largest seafood products consumed in the U.S. and are structurally dependent on imports. The U.S. relies on imported supply for approximately 98 percent of Atlantic salmon consumption and approximately 90 percent of shrimp consumption, reflecting binding constraints on domestic production, including the prohibition on commercial fishing for Atlantic salmon in the U.S. and the limited scalability of U.S. aquaculture,” O’Brien wrote in a letter to the USTR. “As a result, imports are not discretionary; they are essential to maintaining market functionality and supply continuity.”
After his request for an exception, as well as efforts from others in the global seafood supply chain, failed to sway the USTR, O’Brien said the new tariffs will operate as “a direct cost shock to a supply chain that is already highly optimized and margin-constrained” by competitive pricing dynamics in retail and foodservice markets.
“Because shrimp and Atlantic salmon markets are highly import-concentrated, tariffs applied broadly across major supplying countries will not shift sourcing to domestic production; instead, they will reduce supply availability and increase price volatility,” he said. “The inability to fully pass through higher costs to customers will force margin absorption, inventory contraction, or both. This dynamic directly threatens the financial viability of U.S. businesses operating throughout the seafood supply chain and places American jobs at risk.”
Mark Frisch, the chief vision officer at Jacksonville, Florida, U.S.A.-based seafood firm BSF, said the tariffs leave his company in a similarly tough position.
“Salmon is the biggest single swing for us. Chile is our largest origin and Chilean salmon came into this country essentially duty free until now, so 12.5 percent on your highest-volume line isn't an increase. It’s a brand new cost,” Frisch told SeafoodSource, adding that “Norway moves the same direction.”
As for shrimp, he pointed out that India, Ecuador, and Indonesia now have 10 percent tariffs, while the former already had antidumping and countervailing duties in place, and Vietnam, Thailand, and Peru face 12.5 percent tariffs, making shrimp equally difficult to source without rising costs attached.
"The new duties stack on top of the normal rates, the antidumping and countervailing duties, and the older China tariffs. For a book like ours, that means the annual duty bill more than doubles,” Frisch said. “There is no elsewhere. You manage the cost; you don't dodge it. We bought forward where it made sense ahead of the effective date."
In addition to salmon and shrimp, other major species are impacted, such as tilapia from China, pangasius from Vietnam, and spiny lobster from the Bahamas, all of which sport a 12.5 percent tariff.
Channel Fish President and CEO Thomas Zaffiro told SeafoodSource that the Section 301 tariffs represent yet another trade disruption that makes it difficult for firms to plan long term.
In the first round of tariffs implemented last year, Zaffiro called Channel Fish the “first loser” as it did not pass along price increases fast enough. So far, the company has received only USD 40,000 (EUR 34,655) in refunds of the USD 100,000 (EUR 86,638) it paid after the U.S. Supreme Court deemed those tariffs illegal.
“The second loser is the American consumer now paying extra money to eat food. I don’t think there should be tariffs on anything essential to people's survival,” he said. “I don’t see how the new round of tariffs could possibly be any more poorly executed than the first batch, but I guess maybe we’ll be surprised.”
Frisch agreed that the inconsistency around tariffs has made it extremely difficult to conduct business.
"What we can't plan around is a tariff regime that has changed four times in 18 months – the original tariffs, the Supreme Court striking them down, a temporary stopgap, and now a new program, with a refund system being built to unwind round one,” he said.
O’Brien said Santa Monica Seafood is actively working with both vendors and customers to maintain volumes and is continuing to explore opportunities to expand domestic sourcing where feasible. However, he also warned the firm will likely have to pass some of the cost onto the end consumer.
“While every negotiation is unique and we take pride in supporting our customers, the combined impact of fuel surcharges, feed cost inflation, and tariffs makes it difficult to avoid some level of customer price increases in the short to medium term,” he said. “Customer preferences, species specifications, and our sustainability commitments will ultimately determine the overall product mix we are able to provide.”
Frisch said BSF also sources domestically when sensible but said the large majority of seafood Americans eat is imported because domestic volume isn't nearly enough to meet demand.
Some relief, though, has come from Canada, according to Frisch.
“The one piece of good news in our book: Snow crab and lobster stay clean as long as the entries qualify under the [United States-Mexico-Canada agreement], which most Canadian seafood does,” he said. “We're making sure our Canadian product qualifies under the USMCA, our suppliers are sharing some of the burden, and the rest works through the chain the way it always does.”
