Brazil's fish industry, hit with a 50% US tariff, seeks a lifeline

SAO PAULO: Brazil's seafood industry is sounding the alarm to pressure the federal government for immediate relief as it grapples with mounting fears of job losses and bankruptcies as a result of the 50% tariffs the U.S. imposed on most Brazilian exports on Wednesday.

AI Brief

Brazilian fishing companies face crisis after US imposes 30% tariffs, risking US$400 million in exports and thousands of jobs.
Industry leaders call for emergency credit and urge reopening of the EU market to offset losses.
Premium seafood products may flood Brazil's domestic market at lower prices, benefiting consumers but hurting fishermen's incomes.

The new levies made the future highly uncertain for Brazilian fishing companies, which sell close to $400 million worth of seafood to the U.S. a year, or about 70% of the sector's annual exports.

"This situation renders our business unviable," said Arimar França Filho, the head of a fishing union in Brazil's northeastern state of Rio Grande do Norte. "While the domestic market can absorb some of our production, it cannot take it all, and we cannot have all our boats fishing solely for Brazil.

"The fish industry is calling for an emergency credit line of 900 million reais ($165 million) to navigate the new economic climate. It is also pushing the government to deepen negotiations aimed at reopening the European market, which has been closed to Brazilian fish exports since 2017.

Even as producers scrambled to get their goods to the U.S. ahead of the tariffs that hit on Wednesday, some fishing boats had already been sidelined to prevent excess production, the union leader said.

Eduardo Lobo, president of the lobby group Abipesca, said that the sector has no other short-term alternative.

"Without credit, it's impossible to maintain inventories, honor commitments, and preserve jobs," he warned in a statement, estimating that the tariffs could affect some 20,000 jobs if authorities fail to respond quickly.

"There could be giant unemployment, not tomorrow," said Attilio Sergio Leardini, founding partner at Leardini Pescados, one of Brazil´s largest suppliers, which exports to several countries, including the U.S. "But maybe in six months, in a year, some segments may be halting production."

Leardini is most worried about premium products – such as lobster, tuna, and croaker fish – which are highly sought after by the U.S. market but are unlikely to find enough buyers in Brazil, particularly at the prices American consumers pay.

Many fishermen are desperate, believing they won't find consumers to pay prices that support a reasonable standard of living for their families.

"But as we know, it's not in our control," said França Filho, the union leader.

Fishermen, he predicted, will see reduced prices starting this week, while Brazilian consumers are likely to find cheaper fish in the supermarket aisle within a month.

That much was happy news to Michel de Oliveira França, the owner of a fish shop in the city of Niteroi, in Rio de Janeiro.

"The cheaper, the better," he said. "The tendency is to sell more and more."