The impact of the Trump “trade war” with China

The impact of the Trump “trade war” with China

SDC Market Watch – August 22, 2018

US exports to China of frozen whole Alaska pollock

What’s going on here?

It is safe to say that the trade policies of Donald Trump have already impacted the international seafood trade. It looks like the looming “trade war” with China is already upon us as the next round of Chinese round of trade tariffs are hitting US seafood coming and going.

What does this mean?

On July 6, the first 25 percent tax went into effect. This means that more than 170 US seafood products imported into China are already impacted and more is coming this week with the addition of fish meal. Therefore, it looks like that the seafood tariffs to China will significantly impact US exports to China.

Why should I care?

For you, personally:

In the long run import tariffs could lead to a shift in US exports to other markets as US companies try to move their products to other markets. In the short term there may however be opportunities for companies outside the US as the competitiveness of US companies facing new tariffs is weakened. Companies that can bypass the US-China trade tariffs would then be in a better position to compete as they would have a cost advantage compared to their US counterparts.

The bigger picture:

Any disruption in the regular trading relationship and the looming trade wars will undoubtedly have negative economic impact in the long-run regardless of possible short-term gains. Increased tariffs will lead to difficulties in the value chain and further challenges with sourcing that will negatively impact the performance of companies as a whole. Uncertainty and increased risk, regardless of what in which sector companies operate, is bad for the bottom line.

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