Tariff refund order draws skepticism from US shrimp market

The US shrimp market has shown little immediate reaction following the Court of International Trade's order directing US Customs and Border Protection to move forward with refunds for tariffs collected under the struck-down "reciprocal" duties, as market participants remain skeptical about how the process will unfold and whether reimbursements will meaningfully affect trade flows.

Despite the ruling, participants in the shrimp market said uncertainty surrounding how refunds would be calculated and distributed has limited any immediate market response.

Complex tariff timeline complicates reimbursements

One importer said the series of tariff changes implemented over the past several months has made reimbursement calculations extremely complicated.

"The market has gone through multiple tariff periods already," including an initial 10% rate, an increase to 15%, a brief period at 0%, and a return to 10% with the possibility of another increase to 15%, the importer said. Determining who ultimately deserves refunds could prove difficult, the importer said, as many sellers did not fully pass through tariff increases to customers.

According to the importer, price adjustments were often limited to small increases of a few cents per pound rather than the full tariff amount, complicating efforts to determine how much should be reimbursed.

The source also questioned whether the administration would ultimately return billions of dollars in collected duties.

"I don't believe they want to give the money back," the importer said, adding that companies are unlikely to issue reimbursements to customers unless they first receive funds from the government.

The importer pointed to a prior antidumping case involving Ecuadorian shrimp in which duties were eventually returned following a court ruling, but said even in that instance, the refunded money was unlikely to have been passed along to buyers.

Tariffs weigh on seafood demand

Beyond the reimbursement process itself, market participants said tariffs have already affected consumption trends in the US.

A second importer said higher tariffs ultimately raise prices throughout the supply chain, reducing purchasing power and weakening seafood demand.

"Tariffs have had a negative impact on seafood consumption," the importer said, noting that rising costs have affected not only shrimp but also other seafood products such as salmon and trout.

The importer added that even if refunds are issued, it remains unclear whether consumers, who ultimately absorb much of the cost, would benefit from the reimbursements.

DDP trade structures may limit refund impact

Some participants also said the structure of shrimp trade flows could further limit the impact of any reimbursements.

A buyer said many shrimp transactions are conducted under destination-duty-paid terms, where overseas packers assume responsibility for tariffs before shipments reach the US. Under those arrangements, the buyer said any refunds would likely be issued to exporters rather than US importers. As a result, importers may struggle to recover refunded duties from suppliers.

The buyer also expressed skepticism that reimbursements would materially influence the market, citing the historically complex and slow nature of customs duty adjustments.

Looking ahead, the buyer said a 15% tariff rate could ultimately emerge as the long-term baseline for shrimp imports, effectively leveling the playing field among exporters such as Ecuador, India and Indonesia.

India-Ecuador price relationship remains key

Even amid tariff uncertainty, market participants said the competitive relationship between India and Ecuador continues to shape purchasing decisions.

One importer said India is likely to retain a cost advantage over Ecuador even if all exporters ultimately face the same base tariff rate, though India remains subject to anti-dumping and countervailing duties. According to the importer, Ecuador remains competitive as long as its shrimp prices stay within roughly $0.50/lb of India's.

"If Ecuador gets more than about 50 cents above India, buyers will jump to India," the importer said.

Another importer said tariffs have created broader instability in the shrimp market, making it difficult for suppliers to plan production and sales.

The source said Ecuador continues trying to balance exports between China and value-added markets but remains at a disadvantage when competing with Asian producers if tariff protections are reduced, particularly given Ecuador's higher labor costs and dollar-based economy.

The importer added that China remains a critical outlet for Ecuadorian shrimp, accounting for roughly half of exports, particularly for shell-on product.

Amid the uncertainty, the importer said some market participants are reducing exposure to shrimp altogether.

"I'm staying away from shrimp right now and focusing more on fish," the importer said, citing the risks associated with tariff volatility and destination-duty-paid sales structures.

Market participants said the shrimp trade is likely to remain cautious until the final tariff structure becomes clearer and the timeline for any refunds is better defined.

Platts assessed US Shrimp CIF New York at $4.20/lb, unchanged from the previous session.