Americans love eating tilapia, which is the fourth most favored seafood on American dinner tables, only after shrimp, salmon, and cod. For Maoming, Guangdong Province, the American food preference has brought business opportunities to this small city as fishing and exporting tilapia has become the livelihood and source of income for tens of thousands of people.
Maoming is China’s largest tilapia production base, the largest tilapia aquaculture advantage area, and export processing base, known as the “Tilapia Capital of China.” The annual tilapia production in Maoming accounts for about one-ninth of the national total.
Currently, the U.S. has imposed a 145% tariff on most Chinese goods, and in response, China, despite its weak domestic economy and sluggish demand, has retaliated with a 125% tariff on American products, effectively interrupting trade between the two countries.
According to a report by Reuters on April 24th, the tariffs mean that China’s $425 million tilapia exports to the U.S. will now face a 170% tariff, nearly cutting off the opportunity to export to the largest market in the United States.
The area of tilapia aquaculture in Maoming is about 1.5 times that of San Francisco. Hatcheries and feedlots support these aquaculture facilities. Maoming is home to 16 factories that process tilapia into fillets for export, with the majority being sold to American supermarkets.
In late April, hatcheries visited by Reuters in Maoming mentioned not receiving new fry orders; feed manufacturers stated that customers were reducing production. Processors are idle, and many farmers are incurring losses at current prices.
One of China’s largest aquaculture companies, Tongwei Group, stated this month that one-tenth of the tilapia farmers nationwide may become unemployed.
“These high tariffs are a huge blow to us,” said Huang Songfei, a long-time buyer in Maoming. “The entire industry chain is being affected. People are facing the risk of unemployment.”
Tilapia may only be a small part of Sino-U.S. trade, but as massive tariffs are imposed on imported products due to the trade war, the livelihoods of Maoming residents are also being challenged.
Or as Huang Songfei put it: “We are in a dilemma.”
March to May is typically the peak time for tilapia stocking. Just-hatched fish usually have a high demand and are quickly sold to aquaculturists. This spring, orders are scarce.
“This year is the most difficult one,” said a worker who preferred to remain anonymous. “Usually, by now, we would have sold so many. But now, no one is buying. Farmers are scared.”
Her boss mentioned a sales drop of more than half.
“Some (businesses) didn’t even export to the U.S., but they are still panicking,” said the boss, who also requested anonymity. “This is a chain reaction.”
In early April, due to tariffs imposed by both the U.S. and China, tilapia prices plummeted by 17%. Mr. Huang said that despite a slight rebound in prices, they remain at dangerously low levels, making it difficult for some farmers to sustain their livelihoods.
The 16 export processing enterprises in the city also face challenges. According to the local government, they used to export about 100,000 tons of tilapia annually, mainly to the United States and Canada, enough to meet the yearly fish consumption of 25 million Americans.
“If this situation continues, everyone will go bankrupt,” said Zhu Huazhi, a procurement officer at several processing plants. Over 60% of their tilapia was previously exported to the U.S.
In Hainan Province, the U.S. accounts for half of the province’s tilapia exports. This month, the local aquaculture association urged businesses to seek new markets domestically and abroad.
However, replacing U.S. demand is not easy. While there are markets in the EU, Africa, and the Middle East, they cannot quickly or fully substitute American demand. For example, according to a tilapia exporter, Africa primarily imports unprocessed whole fish.
Domestic economic recovery is also challenging. With a weak domestic market, cautious consumers, slowing expenditures, and difficult domestic sales of tilapia, the industry faces hardships.