Tariffs, Trade Wars, and the Seafood Struggles
Over the past few months, there’s been a lot of noise around tariffs. For many small businesses in Hong Kong and across southern China involved in seafood trading, importing, or exporting, these shifts are more than just headline news. They affect your margins, your supply chains, and your day-to-day decisions.
Let’s break it down.
During Donald Trump’s previous presidency, the U.S. imposed high tariffs on many Chinese goods, including seafood. Seafood from China is imposed a whopping 25%, causing the Chinese exporters to panic overnight.
Fast forward to 2025, the situation got tense again. Earlier this year, the U.S. slapped a blanket 10% import tax on nearly all imports and additional “reciprocal” tariffs on goods from countries like China, raising effective rates for Chinese seafood to as much as 145%. The tariffs were not only targeted at China but most countries having trade ties with the US.
That was a major blow to exporters and processors in China and traders in Hong Kong trying to tap into the U.S. market. On May 12, a 90-day trade truce between the U.S. and China kicked in. Tariffs on Chinese goods were cut down to 30%, and China dropped its retaliatory tariffs to 10%. Other tariffs aimed at seafood imports from Vietnam and the EU are also on pause as of now.
Despite the lowered tariff, U.S. restaurants and retailers are already passing along the costs of tariffs to customers and have warned that future price increases on their products may happen should higher tariffs kick in.
- Impact on US restaurants:
Due to tariffs, the cost of seafood at a typical US restaurant has increased by twenty percent. Restaurant owners are tightening their margins as prices had already risen in the past few years due to rapid inflation. With the impact of tariff, business has become unsustainable overnight.
- Impact on Imported Seafood Producing Sources:
The sudden changes in tariff has caused ripple effects in seafood production as well. Farmers, fearing price drops are rushing to harvest earlier, overwhelming processing facilities with raw materials. Unable to store the processed seafood, many producers are slashing prices due to oversupply. Without a clear direction in the global trade, the disruption is affecting all the players in the supply chain.
- Impact on US Domestic Producers:
While tariffs are seen as a way to protect the US industry, many domestic producers in the US are affected as well. For example, US lobster fishermen, who rely on Canadian processing capacity, are impacted by tariffs on Canada. Similarly, mass market global seafood are reliant on Chinese processing due to its capability in dealing with seafood at a high volume. These seafood products are heavily affected by the steep tariff imposed on the Chinese. In short, the tariffs can increase costs for seafood producers who export for processing before re-importing back to the US.
- Global Trade Disruption:
US tariffs have disrupted global seafood trade flows, potentially leading to redirected supply to other markets like Europe and Asia. At the producer level, governments of countries with huge seafood export like China, Thailand and Vietnam are working with the suppliers to deal with long term supply and diversification strategies. In import-focused markets like Hong Kong where hundred of millions of dollars worth of seafood are imported from China each year, this situation could result in lower seafood prices.
- Consumers impacted the most:
Higher seafood prices due to tariffs impact consumers the most, as the large part of the tariff cannot be absorbed by the industry in the long term. This is especially devastating for people who rely on seafood as a regular part of their diet. The increased cost of seafood can also lead to reduced consumption in the long term.
Long term thinking
With the volatility in the market, many seafood traders, producers, wholesalers and restaurants are looking at ways to diversify their risks. Businesses that hav strong business ties with China are now looking for alternative sources in the ASEAN countries to build flexibility into their supply chain.
The old model of sending products to China for cheap processing and re-exporting may become a thing of the past. With shifting trade flows, small businesses need to re-imagine where they sit in the seafood ecosystem. Staying agile and building an adaptable business models is eventually the only way to ride out the storm.
