WASHINGTON - Some Chinese shrimp exporters will have to pay discouragingly hefty tariffs of more than 100 percent if they want their products to appear on American dinner tables, the Commerce Department ruled yesterday.
The department's International Trade Commission also placed lower-than-expected tariffs on shrimp imports from Vietnam in a move likely to relieve pressure on the U.S. import market and prevent a surge in retail prices.
The decisions were seen as a victory by the domestic shrimp industry, which has suffered in recent years as cheap shrimp imports from Latin America and Asia have increased supplies and dropped prices in the United States.
Foreign exporters and American importers argue that imported shrimp - which are raised on farms rather than netted as most U.S. shrimp are - are produced more efficiently. American shrimpers claim that their competitors are cheating by dumping their product by selling it below cost to drive U.S. producers out of business.
"The United States is the most open market for shrimp in the world, but we cannot let Chinese and Vietnamese shrimpers violate the rules of free trade to get ahead of their competition," Eddie Gordon, the president of the Southern Shrimp Alliance, said in a prepared statement yesterday.
Last December, the alliance - which represents shrimpers in eight Southern states - petitioned the Commerce Department to investigate possible dumping of shrimp from China, Vietnam, Brazil, Ecuador, India and Thailand. Dumping is illegal in the United States, and is punished with tariffs aimed at putting law-abiding companies on an equal footing.
In July, the Commerce Department issued preliminary anti-dumping tariff determinations for the six countries, which last year provided 90 percent of the shrimp consumed in the United States.d Final determinations for China and Vietnam were announced yesterday, and decisions on the other four countries are to be made Dec. 20.
The Commerce Department placed a countrywide tariff of 112.81 percent on Chinese shrimp imports and 25.76 percent on Vietnamese imports. A handful of large companies that account for the majority of each country's shrimp exports received lower individual tariffs after complying with the anti-dumping investigation. They averaged about 55 percent in China and about 4 percent in Vietnam.
The U.S. shrimp industry and its lawyers accurately predicted the Chinese tariffs last summer, but the Vietnamese tariffs are far below the 90 percent or so that they had expected.
James Jochum, the assistant commerce secretary, attributed the change of heart on Vietnam in part to the willingness of Vietnamese shrimp producers to aid the Commerce Department's investigation. The department also changed its complex pricing-assessment methodology in Vietnam's favor.
China, the second-largest exporter of shrimp to the United States behind Thailand, could see its share of the American market reduced, according to industry analysts. The 18 Chinese companies that are saddled with the countrywide rate now stand little chance of competing with other producers.
Shrimp industry analyst John Sackton characterized Vietnam's lower tariffs as an unexpected victory for the country, one that probably will allow Vietnam - the United States' third-largest foreign-shrimp supplier - to remain in the American shrimp market.
"This is a big deal," Sackton said. "This makes Vietnam a competitive shrimp supplier to the U.S. again."
"I don't really know that it's going to be an advantage or disadvantage for importers," said Travis Larkin, the vice president of the Seafood Exchange, a seafood importer and processor in Coconut Grove, Fla. "But it puts Vietnam back in the game."
Some importers who were banking on the expectation that Vietnam would be let off the hook entirely were disappointed by yesterday's decision.
"Even 4 percent is a 4 percent cost that will be added to the price of shrimp," said Wally Stevens, president of the American Seafood Distributors Association.
"We are obviously pleased that the rates are lower than they were in the preliminary determination" for Vietnam, said Matthew Nicely, a lawyer with the Washington office of Willkie Farr & Gallagher, which represented Vietnamese shrimpers in the case.
"However, we still believe the rates are too high because we provided evidence to Commerce showing margins should have been zero."
American shrimpers also benefited last week when the Senate earmarked $1 million in federal money for the Wild American Shrimp Initiative as part of a $388 billion federal budget package. The initiative is a marketing campaign to persuade customers to pay more for shrimp netted in U.S. waters.
Sen. John McCain, an Arizona Republican who is a critic of pork-barrel spending, derided it as a "no shrimp left behind" act.