The Bush administration on Tuesday proposed tariffs on shrimp imports from China and Vietnam, finding that companies there were dumping frozen and canned warm-water shrimp products into the United States at artificially low prices.
U.S. seafood distributors and retailers said Americans will face higher shrimp prices at restaurants and in grocery stores if the duties, which take effect later this week, are kept. But shrimpers and processors disputed the claims, arguing that those companies' huge profits could absorb any small increase without passing costs on to consumers.
Tuesday's preliminary decision by the Commerce Department was another slap at China on the issue of trade this election year.
Last month, the department proposed new tariffs on wooden bedroom furniture from China that it said was being dumped into the United States. Vietnam was hit with tariffs on its catfish last year, prompting complaints of U.S. protectionism.
The proposed tariffs on Chinese exporters of frozen and canned warm-water shrimp and prawn range from about 8 percent to 113 percent. Vietnam exporters face duties ranging from about 12 percent to 93 percent. Those numbers could change as the department continues investigating.
"I think the message here is clear, that we'll enforce our trade laws,'' said James Jochum, assistant commerce secretary for import administration.
U.S. shrimpers and processors, struggling from rock-bottom prices since 2001, filed the antidumping petition in December, seeking duties on shrimp from China, Vietnam, Thailand, Brazil, Ecuador and India.
Those countries account for about 75 percent of total U.S. imports of frozen and canned warm-water shrimp, Jochum said. China and Vietnam were considered separately because they are not free market-based economies.
China exported 169 million pounds of shrimp worth $419 million to the United States in 2003, while Vietnam exported almost 125 million pounds worth about $588 million, the department said.
A decision on the other countries is expected later this month.
"These rulings confirm what the industry is painfully aware of,'' said Eddie Gordon, president of the Southern Shrimp Alliance, a group representing warm-water wild shrimp fisheries in eight states: North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana and Texas.
The initial decision is "a critical step on the road to recovery for tens of thousands of fishermen, farmers and processors devastated by the massive volume of dumped Chinese and Vietnamese shrimp,'' Gordon said.
The group claims the value of the U.S. harvest dropped by more than half between 2000 and 2002, from $1.25 billion to $560 million, because of dumping. But food distributors and retailers say shrimp consumption in the United States will drop and prices will rise as a result of the duties.
The price of shrimp "is clearly going to rise and it's going to rise dramatically if these taxes are left in place,'' said Wally Stevens, president and chief operating officer of seafood distributor Slade Gorton Co., and chairman of an industry task force opposing the tariffs.
The Commerce Department excluded breaded, fresh, dried and cold-water shrimp and prawns, and those found in prepared meals.
The Bush administration is facing political pressure to show that it is taking action to deal with America's soaring trade deficits and the loss since mid-2000 of nearly 3 million U.S. manufacturing jobs.
The United States recorded a $124 billion trade deficit with China last year - the largest imbalance ever with a single country.
The U.S. International Trade Commission unanimously ruled in February that the imports were a factor in depressing shrimp prices, a necessary finding for an antidumping petition to be successful.
The commission will make a final determination next January on whether U.S. industry is being harmed by the imports. The Commerce Department then will set final dumping penalties.