© RaboResearch
Written by Gorjan Nikolik, senior seafood analyst at Rabobank, the report warns that: "As trade barriers, tariffs, and geopolitical tensions reshape supply chains, the global seafood industry faces a prolonged period of instability. While some markets may eventually stabilize, the uncertainty surrounding trade policy is already deterring investment and undermining long-term planning. Producers in Asia, particularly in the shrimp, freshwater fish, and surimi sectors, are disproportionately affected, while US consumers face rising prices and constrained supply. Strategic diversification - both in sourcing and market access - has become essential, but it is difficult to implement in a cost-sensitive industry. Domestic market development may offer a partial buffer, but the path forward remains fraught with complexity."
Shrimp
For shrimp, US tariffs of up to 50 percent are disproportionately affecting Asian exporters, including India, Vietnam and Indonesia, while Ecuador faces tariffs of no more than 15 percent, giving them the edge.
As the report notes: “While the final outcome of ongoing trade negotiations remains uncertain, the risk of elevated tariffs - particularly for Asian suppliers - is considerable. These exporters dominate the US market, especially in processed and value-added segments. Combined, the various duties could raise effective tariffs on Asian shrimp to between 30% and 50%, compared to a more modest 13% to 15% for Ecuador, the world's largest exporter.
“This disparity in trade treatment is likely to reshape global shrimp flows. Ecuador, which currently sends 46% of its exports to China, may gradually increase shipments to the US, though this will require investment in processing capacity. Meanwhile, Asian suppliers will be forced to redirect volumes away from the US to other markets, including China and Europe, creating oversupply and downward pressure on prices. Given the improbability of passing on tariffs exceeding 40% to US consumers, a decline in domestic shrimp consumption appears inevitable.
“In the near to medium term, the shrimp industry faces a period of heightened volatility and deteriorating market conditions. The global rebalancing of trade routes will test the resilience of producers and expose structural vulnerabilities in the sector's reliance on a few key markets.”
Salmon
The report notes that then salmon sector has long been vulnerable to geopolitical disruptions, but that Trump’s tariffs imposed on Chilean or Norwegian salmon (10 percent and 15 percent respectively) will be largely passed on to consumers, with some trade flows redirected to alternative markets.
However the prospect of imposing 25-35 percent tariffs on Canadian salmon – which is currently under discussion – could hugely destabilise the sector.
As Nikolik explains: “While the likelihood of such measures remains uncertain, their potential impact is considerable. Canadian exporters would be forced to seek new markets in Asia and Europe, which would pose an operational challenge given their reliance on delivering fresh product to the US by truck. The shift would entail significantly higher logistics costs, potentially undermining the viability of salmon farming in regions such as Newfoundland, where investment in hatcheries is already overdue. Even the threat alone of tariffs has had a chilling effect on capital investment.”
Tilapia
Chinese tilapia now faces a 75 percent US tariff, making it uncompetitive, says the report. With few viable substitutes, US consumption is expected to fall sharply, while the repercussions of this contraction will extend beyond the US.
As the report explains: “Following a series of tit-for-tat tariff escalations, the effective duty on Chinese tilapia now stands at 75% - a combination of a longstanding 20% base tariff and an additional 55% imposed during the trade dispute. This makes Chinese tilapia the most heavily taxed major seafood product in the US market.
“Given the price sensitivity of tilapia demand, such steep tariffs are expected to significantly reduce US consumption. Substituting pangasius for tilapia is not a straightforward solution, as the two are not interchangeable in all applications - and Vietnamese pangasius itself is subject to a 20% tariff. Other potential suppliers face similar hurdles. Indonesia, while home to a large tilapia industry, is a minor exporter to the US and faces a combined tariff of over 40%. Brazil, despite its sizeable domestic production, has limited export capacity and currently bears a 50% tariff from the US administration. Smaller producers such as Colombia would require years to scale up to fill the gap left by China.
“The likely outcome is a sharp contraction in US consumption of freshwater fish, driven by the loss of Chinese tilapia as a competitive option. The repercussions of this contraction will extend beyond the US market. Chinese producers are expected to redirect supply to domestic consumers or to alternative markets such as sub-Saharan Africa and Mexico. However, these regions already have established local industries, and without protective tariffs, they may be vulnerable to a flood of low-cost imports. The oversupply in China could be further exacerbated by Vietnamese pangasius exporters also seeking refuge in the Chinese market, at a time when domestic demand growth is at a historic low.”
