Fish oils, ginseng added to Trump's latest tariff lists

13-Jul-2018 - Last updated on 13-Jul-2018 at 15:46 GMT

Dietary ingredients have still mostly escaped the most recent iteration of tariff lists for Chinese goods released by the Trump Administration. The real risk is not to the bottom line but to trade relationships in general, experts in the industry agree.

The list of goods subject to more than $200 billion in tariffs released by the government on Tuesday includes many common nutritional goods. There are more than 1,000 line items on the list released that would be subject to additional 10% tariffs over what they may already be subject to.

Fish oils appear on tariff list

The list includes a wide variety of foods, such as many species of fish and shellfish, and a long list of fruits, vegetables and cereal grains in various forms. As yet the raw materials that go into dietary supplements have not appeared on the lists with a coupe of notable exceptions.

Fish oils and fish liver oils made an appearance on the list for the first time, for example. It’s unclear what, if any, effect this will have on the omega-3s market.

Fish oil supply out of China is not a huge element of the trade. Ellen Schutt, executive director of the Global Organization of EPA and DHA Omega-3s said there had already been various levels of tariffs on the international seafood trade, which affected some GOED members. And Harry Rice, chief scientific officer for GOED, noted that the cost of raw materials in a finished dietary supplement is a small fraction of the overall price. What’s a greater risk, he said, is the poisoning of business relationships, rather than a few dollars difference in price here or there.

Ginseng added to list as well

Scott Steinford is executive director of both the Natural Algae Astaxanthin Association and the CoQ10 Association, both of which have Chinese companies as members. In a note to his members and associated networks, Steinford noted that a number of new tariff line items might affect dietary supplement supply. These include:

Ginseng
Selenium
Sodium
Calcium
Magnesium
Chromium
Zinc
Potassium
Xylitol

Again, it’s unclear what the Chinese market share in these ingredients might be, although the trade in ginseng is significant. And it’s also unclear whether the line item “Ginseng roots, whether fresh or dried, cut or powdered” would apply to a ginseng extract.

Two way street

In any case, Steinford agreed with Rice that the mounting tit for tat nature of the trade dispute with China is mostly risky because of what it could mean for future business relationships.

“I don’t know how much more we can add items to these lists and still feel like it can be beneficial to the overall goal. According to the Trump Administration, the goal was supposed to be protecting trade, growing jobs here in the US and protecting our technology,” Steinford told NutraIngredients-USA.

“There has been a certain amount of retaliation for the Chinese taking our technology, whether legally or illegally. I don’t know if these tariffs will change any of that. But what is clear is that we are creating an atmosphere of animosity,” he said.

“Hopefully this won’t have a ripple effect on things which at the moment are outside of these tariffs lists such as most dietary supplements,” Steinford said. “We need to keep in mind that for both of us to prosper, we need the Chinese to buy our products as well.”