Vietnam tra fish exports to US face tougher competition as tariffs rise

The Vietnam Association of Seafood Exporters and Producers (VASEP) said the higher duties will make Vietnamese tra fish less competitive, particularly for frozen fillets sold in the lower-priced segment, although the U.S. market remains open to exporters that can offer higher-value products.

Le Hang, VASEP deputy secretary-general, told Tuoi Tre (Youth) online newspaper on Monday that the final results of the 21st administrative review (POR21) of anti-dumping duties on Vietnamese tra fish were considerably less favorable than the preliminary results announced earlier.

Under the final results, the duty rate for Bien Dong Seafood Co. Ltd. rose from US$0.29 to $1 per kilogram, a surge of nearly 245 percent.

The rate for NTSF Seafood JSC increased from $0.07 to $0.38 per kilogram, up more than 440 percent.

The rate applied to two companies that were not individually investigated, Can Tho Import Export Seafood JSC and Nam Viet Corporation, rose from $0.23 to $0.84 per kilogram, an increase of about 265 percent.

The higher duties mean U.S. importers will have to put up significantly more cash deposits for shipments from the affected companies.

Because the anti-dumping duty is calculated as a fixed amount per kilogram, rates of $0.84-1 per kilogram represent a substantial burden for tra fish fillets, which generally have relatively narrow profit margins.

Importers may respond by asking exporters to lower prices, share the additional tariff costs, renegotiate contracts or switch to other suppliers.

The pressure is compounded by the 12.5-percent Section 301 tariff already imposed on Vietnamese products.

As a result, Vietnamese tra fish will face stronger competition from farmed catfish in the U.S. and alternative whitefish products, Hang said.

However, the new rates do not apply uniformly to all Vietnamese tra fish exporters.

Some companies retain their previous rates or are outside the scope of the latest review.

VASEP therefore said the U.S. market has not closed to Vietnamese tra fish, but opportunities have narrowed and competition will increasingly vary from one exporter to another.

Companies facing duties of $0.84-1 per kilogram are likely to struggle in the low-priced frozen fillet segment and should instead focus on higher-quality, deeply processed and value-added products.

Exporters urged to avoid cutting prices at any cost

Affected companies should promptly work with U.S. lawyers to review the duty calculations and determine whether there are administrative errors or legal grounds for challenging the results, according to Hang.

They should also recalculate the total cost of each shipment, including duties, and negotiate early with U.S. importers over prices, volumes and arrangements for sharing the cost of higher cash deposits.

VASEP advised exporters against cutting prices at any cost to retain orders, as doing so could undermine profitability and potentially create disadvantages in future administrative reviews.

In the long term, companies should strengthen their accounting systems and documentation throughout the production chain, from farming areas, feed and fingerlings to processing, inventories, sales and logistics.

Records should be consistent, verifiable and capable of meeting the U.S. Department of Commerce's requirements.

Exporters should also increase their share of deeply processed and value-added products while maintaining relationships with U.S. customers and expanding into other markets, including China, members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the EU, ASEAN, the Middle East and South America.