COULD AK-CHINA NATURAL GAS DEAL MAKE SEAFOOD A FUTURE TARGET?
Alaska seafood has escaped the growing trade war with China, for now.
Friday’s announcement that China will slap higher tariffs on American-made goods, steel pipe, and agricultural products hit Iowa hog farmers and California orchards.
Seafood is not on the list, a relief to the Alaska commercial fishing sector.
Yet it’s a warning of just how much leverage a powerhouse like China could have over a small economic province like Alaska in an era when the state’s fragile economy is growing increasingly dependent on China as a trading partner.
With Gov. Bill Walker now attempting to make deals to sell Alaska natural gas to China, the state could become heavily indebted to the Chinese under the Walker “Pipeline-Poor Plan” whereby Alaska borrows tens of billions of dollars from China and turns over most of the construction and operation of the AK-LNG project to Chinese entities.
In the deal that is only superficially understood by Alaskans, China would also own the rights to 75 percent of Alaska’s gas from the North Slope.
The die has not yet been cast, but negotiations are underway between Alaska Gasline Development Corporation and Chinese banks, financial institutions, and the Chinese government.
HOW A TRADE WAR COULD COME BACK TO BITE SALMON FISHERS
The China Ministry of Commerce issued a list of 128 items it will target for increased tariffs, a first shot back over the bow of the U.S.
States such as California (fruit, nuts, wine), Wisconsin (90 percent of U.S. ginseng), and Iowa, North Carolina, and Minnesota (pork) are going to feel the sting from China’s decision.
China, the world’s largest pork producer, doesn’t actually need Iowa pork, making it an easy target. For now, China likes Alaska’s salmon as a commodity, but increasingly doesn’t need our wild-caught protein. Alternatives in the farmed salmon market are exploding across the world.
Between 80 to 90 percent of wild-caught Alaska seafood is sent to China and re-exported as fillets and fish sticks to the U.S., Europe and Asia. China’s cheap labor in Qingdao, a seafood processing and trading hub, shaves about 80 cents a pound off of salmon that’s had its pin bones removed.
Alaska seafood processing jobs, which once upon a time covered everything from “slime line” to canning, now are reduced to heading and gutting. The fish is then frozen and sent to China, where pin bone removal is left to those making pennies on the dollar.
With Alaska competing with farmed salmon around the world, that calculus could change in a few short years. Fish lovers may value wild, Alaska salmon, yet many are settling for an acceptable, cheaper farmed fish. In fact, consumers have adapted to the milder flavor of farmed salmon, and farming operations have responded to the demand by advancing projects from Chile to South Florida. They are becoming less dependent on antibiotics and are now marketing how sustainable and environmentally friendly they are.
Norway, Chile, and Australia are importing more salmon to China, with Norway taking the prize for the most salmon imported to China. New free trade agreements with European countries are scheduled for a May roll-out, and the 10 percent tariffs on imported salmon and other seafood are expected to drop to as low as zero.
And the pace of change in seafood markets is staggering: The amount of Norwegian salmon that China is importing grew by 1,600 percent in 2017.
China is getting in on the farmed salmon action. In 2016, Rizhao Res Mo Ze Feng Yu Ye Ltd Co., announced it will open salmon farming on the Rizhao coast in the Yellow Sea, water that connects China and Korea.
The company plans to produce 20,000 tons of salmon per year. If China’s coastal provinces become more adept at salmon farming, the value of Alaska salmon could drop dramatically.
Russia is still the largest exporter to China of seafood, followed by the U.S., Norway, Canada, Chile, Indonesia, Australia, Vietnam, Thailand and New Zealand.
THE LIST OF CHINA’S TARIFF TARGETS
The list of U.S. products that China has increased tariffs on (MRAK ran China’s officially published list through Google translate, and has not verified for accuracy)
- Dried coconut
- Coconut without inner shell (endocarp)
- Other coconut
- Unhulled Brazil fruit
- Shelled Brazilian Fruit
- Unshelled Cashew
- Shelled Cashew
- Unshelled almonds
- Shelled almonds
- Unshelled hazelnuts
- Unshelled walnut
- Unshelled chestnut
- Unhulled Chestnuts
- Unhulled Pistachio Nuts
- Unshelled Pistachio Nuts
- Unhulled Macadamia Nuts
- Unshelled Macadamia Nuts (Hawaiian Nuts )
- Betel nut
- Pine nuts
- Unlisted fresh or dried nuts
- Fresh or dried plantains
- Fresh or dried bananas
- Fresh or dried dates
- Fresh or dried figs
- Fresh or dried pineapple
- Fresh or dried avocado
- Fresh or dried guava
- Fresh or dried mango
- Fresh or dried mangosteen
- Fresh or dried orange
- Mandarin orange and Satsuma orange
- Clementine orange
- Verkin orange and similar hybrid citrus
- Grapefruit, including pomelo
- Lemons and limes
- Unlisted citrus fruits
- Fresh grapes
- Fresh watermelon
- Fresh cantaloupe
- Fresh apples
- Fresh pears and pears
- Other fresh pears
- Fresh sour cherries
- Other fresh cherries
- Peach, including nectarine
- Fresh plum and plum
- Fresh strawberries
- Fresh raspberry, blackberry, mulberry and loganberry
- Fresh cranberry and cowberry
- Fresh Durian
- Fresh Litchi
- Fresh Longan
- Bright red Maodan
- Fresh sweet lychee
- Fresh Carambola
- Fresh lotus fig
- Fresh Pitaya
- Fruits not listed
- Frozen Strawberry
- Frozen raspberry, blackberry, mulberry, loganberry, currant (gallon) and gooseberry
- Frozen fruits and nuts, not listed
- Temporarily preserved cherries
- Other temporarily preserved fruits and nuts
- Dried apricots
- Mei Qiang and Li Gan
- Dried apples
- Dried longan and meat
- Dried persimmons
- Red dates
- Dried Litchi
- Unlisted dried fruit
- Sparkling wine
- Other fresh grapes brewed in containers of two litres or less or alcohol-inhibiting brewing
- Grape juice
- Wines made from other fresh grapes packed in two-liter or more but not more than 10-litre containers, or alcohol-suppressed brewed grape juice
- Wines made from other fresh grapes loaded in more than 10 containers or alcohol-inhibited brewed grape juice
- Wine grape juice other than item 20.09
- The third type of modified ethanol
- Any concentration of modified ethanol and other alcohol
- American ginseng
- Other fresh ginseng
- Unlisted ginseng
- Fresh or cold boned pig forelegs, pig hind legs and their meat
- Other fresh or cold pork
- Other frozen whole head and half pork
- Frozen pork bones, pig hind legs and their meat
- Other frozen pork
- Frozen pork liver
- Other frozen pork chops
- Stainless steel oil and gas pipeline pipe, 215.9mm â‰¤ outside diameter â‰¤ 406.4mm 89 stainless steel oil and gas pipeline pipe, 114.3mm < outside diameter <215.9mm 90 stainless steel oil and gas pipeline pipe, outside diameter â‰¤ 114.3mm
- stainless steel oil and gas pipeline pipe, outside diameter > 406.4mm
- Other steel oil and gas pipeline pipes, 215.9mm â‰¤ outside diameter â‰¤ 406.4mm 93 Other steel oil and gas pipeline pipe, 114.3mm < outside diameter <215.9mm 94 Other petroleum and natural gas seamless pipe pipe, outside diameter â‰¤ 114.3mm
- Other steel oil and gas seamless pipe, outside diameter > 406.4mm
- Stainless Steel Drilling Oil and Gas Drill Pipe, Outside Diameter â‰¤168.3mm 97 Stainless Steel Drilling Oil and Gas Drill Pipe, Outside Diameter>168.3mm 98 Other Steel Drilling Oil and Gas Drill Pipe, Outside Diameterâ‰¤168.3mm
- Other Steel Drilling Oil and Gas Drill pipe, outer diameter >168.3mm
- stainless steel seamless casing and conduit for drilling oil or natural gas
- Other seamless steel casings and conduits for oil and gas drilling with a yield strength of less than 552 MPa
- Other seamless steel casings and ducts for oil and gas drilling with yield strengths equal to or greater than 552 MPa but less than 758 MPa
- Corrosion-resisting oil and natural gas seamless pipes and ducts for other steel drills with a yield strength of 758 MPa or more
- Seamless boiler tubes for cold drawn or cold rolled iron or ordinary steel
- Cold drawn or cold-rolled iron or plain steel seamless geologic drill pipe, casing 106 Undrawn cold-drawn or cold rolled iron or plain steel seamless circular cross-section pipe
- Non-cold drawn or cold rolled iron or ordinary steel seamless boiler tubes
- Non-cold drawn or cold-rolled or ordinary steel seamless geologic drill pipe, casing
- Unlisted non-cold drawn or cold-rolled iron or ordinary steel seamless circular cross-section tubes
- Cold drawn or cold rolled stainless steel seamless boiler tubes
- Unlisted cold rolled or cold rolled stainless steel seamless circular section tubes
- Non-cold-drawn or cold-rolled stainless steel seamless boiler tubes
- Unlisted non-cold drawn or cold-rolled stainless steel seamless circular cross-section tubes
- Cold-drawn or cold-rolled other alloy steel seamless boiler tubes
- Cold drawn or cold-rolled other alloy steel seamless geologic drill pipe, casing
- Cold rolled or cold-rolled alloy steel seamless circular cross-section tubes, not specified
- Non-cold-drawn or cold-rolled other alloy steel seamless boiler tubes
- Non-cold-drawn or cold-rolled other alloy steel seamless geologic drill pipe, casing
- Unlisted non-cold drawn or cold-rolled alloy steel seamless circular cross-section tubes
- Other seamless steel tubes and hollow profiles (excluding cast iron)
- The seventh category scrap aluminum
- Aluminum scrap