U.S. President Donald Trump’s trade war has sent seafood companies scrambling to move production and secure new trade partners as they desperately seek to avoid the brunt of new tariffs.
“We’re living in a brave new world,” Matthew Latimer, managing director and general counsel of ACT Capital Advisors, said during a panel at Seafood Expo Global, which took place from 6 to 8 May in Barcelona Spain. “The recent round of trade restrictions and tariffs that were announced in the United States have triggered a scramble among seafood suppliers and distributors and wholesalers and retailers to constantly adapt – maybe on a daily basis – to an ever-changing trade environment. Geopolitical conflicts have disrupted supply chains, consumptions trends, and human lives, and then economic and environmental and regulatory changes have put pressure on operators to deliver sustainable, high quality, desirable products, all while navigating increased market complexity.”
“In other words, for the seafood industry, this is just another day at the office,” he said.
Trump made imposing tariffs a key part of his presidential campaign, and since taking office he has moved quickly to enact financial barriers on imported goods. On 2 April, Trump announced a minimum 10 percent tariff on all imported goods, with a range of higher tariffs on goods from 57 countries. The announcement, dubbed “Liberation Day” by the president, sparked a panic in the market, and Trump announced a 90-day pause before the higher tariffs go into effect. The minimum 10 percent tariff, however, remains in place, and tariffs on China have skyrocketed.
According to ACT Capital Advisors Managing Director Brad Bodenman, who serves as co-chair of the firm’s Seafood Sector Advisory Practice, importers in the U.S. are scurrying to rearrange their supply chains to source from countries that will only have the lower 10 percent minimum tariff applied.
“Those are the people you want to be doing business with, not the ones you currently have,” Bodenman said.
However, the number of exporters operating in lower-tariffed nations are limited, so importers need to move quickly to secure new suppliers before they’re all scooped up, Bodenman added.
“If you’re importing shrimp, or whatever species, you’re going to want to migrate to those as quickly as you can, because there’s a limited supply of those potential 10 percent tariffs versus the other ones that might be 40, 30, 25, and on up. Especially if you’re talking China,” Bodenman said.
He also noted that some companies are considering investing in U.S.-based production as a way of avoiding tariffs.
According to Rafn Árnason, who is the head of seafood at Reykjavík, Iceland-based Íslandsbanki, the response to the tariffs have varied by region; investment in the U.S. and Europe has halted, but it has continued in Asia.
“In Asia, they’re continuing to invest,” Árnason said. “Basically, they’ve decided, ‘we’ve got to figure this out. What do we do about it and continue?’”
And those who act quickly in this space tend to be rewarded.
“There are going to be winners and losers,” Árnason said. “The winners are usually the ones that act quickly and right away.”
For U.S.-based producers that sell domestically, the situation presents an opportunity to gain market share.
“If you’re in the U.S. and you’re a domestic producer, you should be considering how can you partner with somebody. What is the opportunity that you can get out of this?” International Seafood Partners CEO Jeff Davis said. “There will be a lot of opportunities for partnership. U.S. companies tend to be small. Often, they’re family oriented. But I think that the opportunity for these companies to grow with outside capital and investments are great.”
Despite the bevy of challenges facing the seafood industry, the panelists expressed confidence that the sector can weather the storm.
“Tariffs have been around a long time. We’ve had it in the past; industry survived it. We’ll survive this round,” Davis said.
That said, the seafood sector has already weathered several hurdles in recent years: the Covid-19 pandemic, rising inflation, high interest rates, and sanction issues, he noted.
“So industry is very tired right now, and I think it’s going to have to be very cautious about its next moves,” Davis said.
