Opportunity for Vietnam to promote tuna exports to the US

Tuna exports between the United States and China will have significant fluctuations when tax barriers appear in the trade war between the two countries. This will be the opportunity for Vietnam to promote tuna exports to the US.

Packaged tuna exports. Photo: T.H.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the US-China trade war is escalating as both sides implement taxation policies on imported goods. Countermeasures on both sides will drastically reduce Chinese tuna exports to the United States and vice versa.

"Is this an opportunity for Vietnam to supply tuna products to both countries”?,VASEP said.

According to statistics from the World Trade Center (ITC), China is currently the fifth largest tuna supplier to the United States. In 2017, the United States imported 23,500 tonnes of tuna products from China, worth $ 127 million, up 16 percent in volume and 28 percent in value over the same period in 2016.

In particular, canned tuna products accounted for 94% of total US tuna imports. The remainder being fresh and frozen tuna products.

Meanwhile, the United States is currently the fourth largest supplier of tuna to China. In 2017, the United States exported nearly 9,000 tonnes of tuna products to China, worth nearly $US 18 million. Fresh and frozen tuna are the main products of the United States which are exported to China, accounting for 99% of China's total tuna imports.

The US Government has listed more than 6,000 imported items from China that it intends to impose tax in early September 2018. Among them are fresh and frozen tuna products, pushing tuna products on the trade dispute between the two countries.

Skipjack tuna, yellowfin tuna, albacore tuna, bigeye tuna and fresh and frozen bluefin tuna are on the list of products subject to a 10% duty, but this list does not include tuna fillets and canned tuna. Other tuna products are also mentioned in this plan, including fresh and frozen products.

This is due to the fact that the application of the tariff will negatively affect the tuna industry. And no mention is made for tuna fish such as tuna (Euthynnus Affinis) and tuna (Auxis Thazard). Processed tuna products may be included on this list.

Recently, China has also announced changes in import taxes. Accordingly, the current tariff for frozen whole tuna (albacore, yellowfin, bigeye, and bluefin tuna) will not be subject to the provisional MFN (most favoured nation) tariff and the tariff for fresh tuna and frozen tuna will decrease from 12% to 7%.

Thus, if there is no objection, from September 2018, the import tax on fresh and frozen tuna from China to the United States will increase. This will enable other countries to boost the export of fresh and frozen tuna to the United States.

But for canned products, the reality of the US-China trade war has little effect on China's tuna exports to the United States.

This is because China is now the largest supplier of tuna fish products, accounting for 70% of the total US imports. These products are sold as light cut tuna, mainly in the field of food service.

Chunk light tuna is usually skipjack. This tuna species is generally of lower quality and cheaper, thus creating unhealthy competition and downgrading of the US market. This product is not included on the list of US Government taxation in early September 2018.

However, the US trade war with Asian nations has created concern for other countries in the region which have trade deficits with the United States, such as Thailand. Therefore, these countries will be more cautious in promoting tuna exports to the US, especially canned tuna products.

According to VASEP's analysis, this will be a good opportunity for Vietnamese companies to promote the export of products such as frozen loin, tuna fillets to the US market.

On the Chinese side, due to the market share of Vietnam's export to this market being small, so the opportunity for Vietnam tuna business from this trade war is not high.