Two of Alaska’s biggest exports are caught up in the US-China trade dispute

salmon-displayed-in-a-seafood-restaurant-in-china (Photo C/O Sea Grant)_
Salmon displayed in a seafood restaurant in China. (Photo courtesy Alaska Sea Grant)

As President Donald Trump’s trade dispute with China continues to drag out, some of Alaska’s biggest exports expect to be hit with even steeper tariffs than they’ve seen in recent months.

Now the timber and seafood industries are trying to figure out how to do business as the pressure mounts.

The Alaska Seafood Marketing Institute is always on the lookout for innovative ways to create demand for the state’s catch. Sometimes that includes sending salmon to influencers on Instagram.

Other times, it’s strategizing how to get more of the product into the global market. Jeremy Woodrow, a director at the organization, said that’s what they’ve always done.

“But the urgency is probably greater than it has been in recent years,” he said.

That’s because some types of fish caught in Alaska could be 25% more expensive when the product is sent to the markets in China — a country that buys about a quarter of the state’s seafood by value.

Earlier this week, China’s Ministry of Finance announced it would be increasing tariffs — a move prompted by Trump’s latest wave of tariffs imposed on Chinese goods.

The tariff increase cuts both ways. Processed seafood that’s exported back to the U.S. could be subject to a 25% tariff imposed on China.

President Donald Trump speaks to more than 100 Airmen, Sailors, Soldiers, Marines and Coast Guardsmen at Joint Base Elmendorf-Richardson, Alaska, Feb. 28, 2019. The president was at the base to meet with service members after returning from a summit in Hanoi, Vietnam. His plane refueled before continuing to Joint Base Andrews, Maryland.
President Donald Trump speaks to more than 100 Airmen, Sailors, Soldiers, Marines and Coast Guardsmen at Joint Base Elmendorf-Richardson, Alaska, Feb. 28, 2019. (Public domain photo by Staff Sgt. Curt Beach/U.S. Air Force)

Woodrow said that’s created some uncertainty for Alaska’s seafood industry.

“When a product is now subject to increased tariffs, that makes that product more expensive to consumers,” Woodrow said.

And those consumers might just go for a cheaper alternative to Alaska’s wild-caught fish. But Woodrow said the industry is already thinking about some workarounds. Right now, Alaska seafood is processed and sold in China. That’s where the tariffs stack up.

But having the fish processed in Poland could be a way to avoid that.

So Woodrow doesn’t think it’s all doom and gloom.

“There is reason to be concerned,” Woodrow said. “However, I don’t think the sky is falling yet.”

But the situation is very different for Eric Nichols at Alcan Forest Products in Ketchikan.

“We don’t have many options to put that log in another marketplace,” Nichols said. “And so we’re very dependent upon what happens with that Chinese market.”

Nichols will be on the hook for a 20% tariff for spruce trees shipped to his biggest customer: China.

His company sends mostly barges of young-growth trees harvested from Southeast Alaska to the country, and he said that’s the problem: He doesn’t have enough high-value product to help ride out the volatility.

“When we don’t have the access to old-growth anymore, then we don’t have those diversity of markets,” Nichols said. “So if we have one interruption like these tariffs, then it puts you in a situation where you got to decide whether you’re going to be able to stay in business or not.”

That’s a big concern among Southeast Alaska’s small, struggling timber industry.

A few efforts underway could result in more old-growth trees being harvested in the region. But in the meantime, Nichols is trying to get by now, and he said this trade dispute is making it harder.

Still, he’s not ready to stop his operations just yet.

“You want me to lay off everybody?” he asked. “I have bank payments. I have equipment payments. I have employees that depend on us for a very regular paycheck.”

The tariffs increase on U.S. exports could take effect June 1 if a deal between the White House and China isn’t reached.