Question

1. Explain how shrimp "dumping" by Vietnam and China affect the U.S. seafood market.
2. Why would consumers argue that consumers will lose if the U.S. imposes a tariff on shrimp from Vietnam and China?
3. Why would labor unions and politicians argue that tariffs should be imposed on shrimp imports
4. What is your position and how would you defend your position?

Answer 1

Shrimp Dumping in US
China and Vietnam take parts of the US shrimp imports and both the countries follow dumping measures in accordance to find market share in US. With high competition and dumping in unfair price, both countries could increase their export value to US to a higher number. The imposition of tariffs on China’s shrimp exports to US, the consumers start choosing the Vietnam goods over China. Since both countries export shrimp at an unfair price which is lower than the domestic market price, that makes the consumers to benefit cheap imports but the domestic producers or firms finding it difficult to compete with these countries. Even if the US is importing shrimp from various countries across the world, Vietnam and China sells at a very lower price which is a threat to the domestic market.
Dumping of shrimps reduces the demand for domestic market products. This leads the trade unions and the domestic manufacturers to approach the government to reduce the level of imports especially dumping through increasing tariffs and thus price of imports. Also, this will affect increasing unemployment in the domestic shrimp market of the US. That can have further impacts on the economy reducing production and domestic demands. It is necessary to impose tariffs over dumping not imports. Not every import challenges the domestic market, but the dumping does. To stimulate the domestic market, government needs to control dumping to a level and also, the benefits that the consumers lost must be retained through further policies that can effectively reduce the domestic price of the goods by incentives and increasing productivity.