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Seafood under a Strongman
There’s a precedent for the seafood industry under Trump. And yes, it’s exactly what you think it is.
There is more than one reason to be concerned about what a President Trump would bring to the world stage, but we’re in the seafood business, and while this sector was not brought up even once in this insane race, seafood is one of those truly global industries that stands to be radically reshaped depending on Americans' choice.
There’s no question what the world will be getting with either of these two candidates.
Under a President Clinton -- although both Senator Bernie Sanders and Trump have pulled her slightly away from a more conventional free trade position -- we can expect, for the most part, status quo in global trade. Given the continued growth in seafood consumption and imports into the United States, “more of the same” doesn’t seem too bad.
Under Trump, we can expect no less than a complete upending of the flow of global seafood worldwide, set off first by his draconian views on trade.
Just as an example, in 2011 Trump called for a 20 percent import tax on goods into the United States, and during this campaign he turned the dial up to 11 and said he’d seek a 45 percent tariff on Chinese imports.
Let that sink in for a moment. US companies imported 567,566 metric tons in seafood from China in 2015, shelling out $2.7 billion (€2.4 billion) for it. That accounted for, respectively, 21 percent of all seafood imports by volume, and 14 percent of the total value.
Are consumers ready to pay 40 percent more for their seafood? Not likely. Encouraged by the higher prices, protectionist economic theory goes, domestic producers will then flourish as consumers turn to them for their fish needs. Of course, we’ve tried that with Norwegian salmon, Chilean salmon, shrimp of all manner and variety and it’s been…an abysmal failure.
But, if you’re looking for a clue for how a much more fierce protectionist US seafood sector might look, just look at the current favorite paper tiger in the US election, Russia President Vladimir Putin.
Sure, Putin's protectionist ban on food imports from Western countries may have shifted some domestic commodity production to value-added products, and spurred some investments in domestic processing.
On the other hand, the volume has been far from enough to replace the shortfall, and the quality of fish reaching Russian consumers has fallen dramatically. Consumption has in turn taken a hit. The latest statistics showed Russia’s seafood consumption fell to around 14 kilograms per capita through the 12 months to July. That’s down 26 percent from the year prior, and down 37 percent from 2014.
With US consumption on an upswing, it would be a shame to see protectionism halt that growth in its tracks.
Trump touts his policies as reinvigorating the US economy, noting China and Mexico in particular are “killing us on trade."
First, anybody who works in a global sector like seafood can tell you a trade imbalance in China’s favor will soon come to an end. US exporters shipped 443,703 metric tons of seafood to China in 2015, worth $1.1 billion (€996 million). Of course, you can expect that to end almost overnight with the first serious proposal for a 45 percent tariff on imports.
So, we enter into an historic day, with the American people bearing a huge responsibility for how this industry (and so, so many things) operate.
This column has a short shelf life, and my hope is that by the end of the day we can consign it, like the prospect of upending world trade, to the dustbin of history.
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