VASEP: Vietnamese shrimp exports at risk if U.S. holds 46% tariff

Vietnam’s shrimp exporters could find themselves shut out of the U.S. market if Washington proceeds with its proposed 46% countervailing tariff, a rate so steep that even the most loyal consumers might balk at paying.

The United States has long been Vietnam’s largest and most stable market for shrimp, accounting for about 20% of Vietnam’s total shrimp exports. The value of shrimp exports to the U.S. typically ranges from USD 800 million to USD 1 billion annually, hitting a record high of USD 1 billion in 2021. Approximately 230 Vietnamese companies are actively shipping shrimp to the U.S.

On April 3, 2025, President Donald Trump declared a national emergency, enacting higher tariffs to curb the trade deficit and safeguard American manufacturing. Starting April 5, a blanket 10% tariff was applied, with even steeper rates for countries with significant trade surpluses with the U.S. Vietnam, in particular, faces a daunting 46% rate from April 9.

VASEP highlights that this level of tariff far exceeds those faced by regional competitors like Thailand (36%), Indonesia (32%), India (26%), and Ecuador (10%).

“At such a staggering disparity, Vietnamese seafood is simply uncompetitive,” noted a VASEP shrimp market specialist. “With Ecuador paying only 10%, our 46% rate puts us at an impossible disadvantage, even if consumers want to help, they can’t absorb such high costs.”

If these tariffs stay in place, experts warn, the withdrawal of Vietnamese seafood exporters from the U.S. market could quickly shift from possibility to reality.

Another pressing concern is how U.S. customs determines tax applicability. If the tariff is calculated based on the arrival date at U.S. ports, shipments that left Vietnam before April 5 but have not yet arrived could still be subject to the new duties, a scenario that could cause devastating losses.

For example, a shipment valued at USD 5 million could face more than USD 2 million in taxes under the 46% rate, pushing exporters into crisis.

Vietnamese shrimp exporters are also grappling with two ongoing U.S. investigations into alleged anti-dumping and subsidy practices. If these result in additional tariffs, Vietnamese shrimp could be subjected to three layers of taxation.

On a global scale, Latin American producers are poised to seize the opportunity. Ecuador, Argentina, Honduras, and Mexico could boost their U.S. market share, thanks to their lower tariffs. Ecuador, in particular, is expected to scale up production of peeled and value-added shrimp to meet U.S. demand, especially as Chinese demand remains uncertain.

Meanwhile, Asian producers are feeling the squeeze. Vietnam, Indonesia, and Thailand are all grappling with steep tariff hikes, weakening their competitive edge.

India, despite a higher rate than Ecuador, may maintain its position by focusing on products that Latin America does not yet supply in volume. Indian exporters are likely to lean on established U.S. partnerships and expand their presence in European and global markets.

In light of these developments, VASEP has urgently appealed to the Prime Minister and ministries for prompt negotiations with the U.S. government.

VASEP is also urging companies to reconsider shipment schedules: avoid dispatching goods from April 5 to sidestep the 10% surcharge, and avoid shipping from April 9 to escape the full 46% tariff.

Until further guidance arrives, businesses are advised to hold off on exports, maintain high-quality production, boost value-added output, and explore alternative markets.

Source: https://vietfishmagazine.com/