US tariff mess: Seafood containers from Tamil Nadu stranded at sea
THOOTHUKUDI: Seafood exporters in Thoothukudi are literally caught between the devil and the deep blue sea as American importers have started cancelling the ordered consignments that are in transit, citing the new 50% tariff, leaving crores of rupees worth of seafood stranded at sea. Over 1,000 tonnes of seafood consignments (refrigerated containers or reefers), worth nearly Rs 100 crore, sent to the US are currently in transit.
After the US President Donald Trump’s 50% tariff on Indian goods kicked in on August 27, the buyers are urging the exporters to either bear the difference in tariff hike or take back the consignments, Seafood Exporters Association of India (SEAI) - TN Region president Selwin Prabhu told TNIE. Thoothukudi exports frozen seafood like vannamei (Whiteleg shrimp), squid and octopus in large quantities to the US market. Shrimp alone accounts for 85% of the export.
Prabhu said though most exporters had gradually reduced the quantum of export to the US due to the tariff uncertainty over the last few months, more than 1,000 tonnes of seafood consignments are currently in transit as it takes nearly 45 days to reach the port of New York or Los Angeles.
Voicing concern about buyers mailing exporters to cancel goods in transit, Prabhu said, “Buyers want exporters to bear the 50% tariff cost to accept the consignments or they are threatening to return them. We entered into agreements with buyers when the tariff on Indian goods was 10%. The steep tariff of 50% has upended everything.”
Exporters say increased tariff will lead to massive job losses
According to industry insiders, seafood shipments executed before August 6 attracted 10% tariff, and 25% tariff until August 26. From August 27 onwards, the tariff was hiked by another 25% as a penalty for buying Russian oil making it a total of 50% tariff.
Also, shrimp export, which accounts for a major part of the export to the US, attracts an additional 8.5% duty over and above the 50% tariff. Requesting anonymity, an exporter told TNIE that he had exported five to six containers approximately carrying 100 tonnes of seafood to the US market and it is expected to land at New York port in another 10 days.
“The buyer had refused to receive the consignment due to increased tariff and had mailed us to consult a liner for returning the goods,” he said. The exporters said that they would continue to negotiate with the buyers, but if the situation continues, it will lead to massive job losses.