On July 6 the US Commerce Department tentatively set tariffs ranging as low as 7.67% to as high as 112.81% on shrimp imports from China and Vietnam.

Though the ruling is still subject to further investigation and rulings by the department and the International Trade Commission, the two countries will be required to make cash deposits equal to tariff values.

The tentative tariffs would range from 7.67% to 112.81% for China, and from 12.11% to 93.13% for Vietnam.

Also, since the two countries are classified as “non-market economy” by the US government, the ruling will likely be maintained, perhaps with slight reduction in tariff rates, in the subsequent rulings. Commerce and ITC plan to hand out the final rulings by Jan. 8, 2005.

The case is a part of US shrimp farmers’ dumping complaint filed last December against six countries, which include, along with the two countries, Thailand, India, Brazil and Ecuador.

To these four countries, Commerce will hand out preliminary rulings by the end of this month. It is unclear, however, whether the department will also rule in favor of slapping tariffs on the four, because they are categorized as “market economies” whose chances of being acquitted from charges in alleged dumping cases are far higher than those of non-market economy countries, analysts say.

When calculating fair prices for imports from non-market economies, Commerce ignores the countries’ own price and cost data and instead uses relevant figures from free-market countries that the department regards as being at a similar stage of economic development.

The volume of imports from China in 2002 was 105.9 million pounds worth $295 million and that from Vietnam about 97 million pounds worth $488 million. Shrimp from Vietnam have a higher unit price, at $5.03 per pound, than those from China, at $2.79 per pound. In terms of volume, each country has a share of about 10% in the US shrimp import market, according to Commerce statistics.

The petitioner, the Southern Shrimp Alliance, represents thousands of small US shrimp farmers from eight states. It has been demanding that the government impose tariffs ranging from 30% to 267% on imports from the six countries.

In its petition, the group claimed that cheap imports cut the value of the US shrimp harvest to $560 million in 2002 from $1.25 billion in 2000, during which time the average dockside price of Gulf of Mexico shrimp nearly halved to $3.30 a pound.

The ITC said in its preliminary ruling in February that prices for various types of shrimp fell during the three-year period by between 16% and 62%.

Vietnam’s economy could be affected substantially by the ruling because shrimp is the country’s third biggest export item, earning much needed hard currency, and the industry hires nearly two million people. (Dow Jones)