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Photo: Stockfile/FIS
US Tax Tsunami Hits Vietnamese Shrimp: Market Share Under Siege
VIET NAM
Thursday, April 10, 2025, 10:00 (GMT + 9)
A crippling 46% reciprocal duty threatens Vietnam's long-standing dominance in the US shrimp market, jeopardizing billions in export revenue.
.jpg) For years, the United States has been Vietnam's largest and most reliable shrimp export destination, consistently absorbing approximately 20% of Vietnam's total shrimp export turnover.
Vietnam's annual shrimp exports to the US have fluctuated between USD 800 million and USD 1 billion, reaching a peak of USD 1 billion in 2021. According to Ms. Kim Thu, a Shrimp Market Expert at the Vietnam Association of Seafood Exporters and Producers (VASEP), around 230 Vietnamese enterprises currently participate in exporting shrimp to this crucial market.
However, a significant shift is underway. While a 10% tax rate will apply to all countries from April 5th, nations with substantial trade deficits with the US will face significantly higher tariffs from April 9th. Vietnam is set to bear a staggering 46% tax – a rate drastically higher than its seafood export competitors such as Thailand (36%), Indonesia (32%), India (26%), and Ecuador (a mere 10%).
This immense tax disparity severely undermines the competitiveness of Vietnamese seafood, a billion-dollar export item to the US in 2024. The 46% duty renders Vietnamese shrimp virtually unable to compete, particularly against Ecuador's significantly lower 10% tariff, making it unaffordable for both businesses and potentially consumers.
While initial predictions anticipated a tax rate around 10%, the actual figure has proven to be many times greater. Without effective intervention from the Vietnamese government or successful negotiations to adjust the tax rate, withdrawal from the lucrative US market is becoming an increasingly likely prospect for many exporters.
 Further exacerbating the situation is the concern that if the US calculates taxes based on the date of arrival rather than the date of departure, shipments that left Vietnam before April 5th but have not yet reached the US could still be subjected to the new, higher tariffs, potentially causing catastrophic financial damage.
Calculations suggest that a single shipment valued at USD 5 million could incur losses exceeding USD 2 million if subjected to the 46% tax, placing Vietnamese businesses in an untenable position.
Adding to these challenges, Vietnamese shrimp exports are already contending with the pressure of two ongoing anti-dumping (AD) and anti-subsidy (CVD) lawsuits in the US. The potential imposition of additional duties from these legal actions could result in Vietnamese shrimp facing up to three layers of taxes, further crippling its market viability.
Global Shrimp Trade Scenario After US Reciprocal Tax Announcement:
Advantage for Latin America: Ecuador, along with countries like Argentina, Honduras, and Mexico, stand to gain increased market share in the US due to their significantly lower tariffs. Ecuador and other Latin American producers are likely to focus on expanding their production capacity for peeled and value-added products, which are in high demand in the US. This development is particularly timely for Ecuador, given the uncertain demand from China, as a stronger foothold in the US market could mitigate this risk.
Challenges for Asian Countries: Vietnam, Indonesia, and Thailand face substantial tariffs, severely impacting their ability to compete effectively in the US market.
.png) India: Despite facing higher tariffs than Ecuador, India may be able to maintain its market share by strategically focusing on product segments that Latin American countries do not adequately supply. Furthermore, Indian suppliers are likely to strengthen their established relationships with US retailers while simultaneously increasing exports of peeled and value-added products to the EU and other alternative markets. Diversification into other shrimp species and the development of fish farming, processing, and export operations are also likely strategies.
There is an expectation that ongoing negotiations between the Vietnamese and US governments will yield positive outcomes. In the interim, shrimp exporting enterprises are strongly advised to carefully evaluate the timing and planning of their shipments to avoid incurring unwanted tax liabilities. Specifically, exporters should avoid shipping goods between April 5th and April 9th, 2025, to circumvent the 10% additional tax and the subsequent 46% reciprocal tax, respectively. Businesses should await further instructions from the Government and relevant ministries before finalizing future export strategies and plans. Simultaneously, maintaining the production of high-quality, high-value-added products and actively exploring alternative markets remains crucial for the long-term sustainability of the Vietnamese shrimp industry.
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