Chilean salmon regions 'facing $1bn hit from Trump's tariffs'

The combined impacts of United States president Donald Trump’s import tariffs will cause a loss of more than US $1 billion to Chile’s salmon producers and the economies of the southern regions where the fish are produced, according to a study by San Sebastián University and fish farmers’ and suppliers’ organisation SalmonChile.

The estimate is based on the direct impact of the 10% import tariff on the revenues of Chilean salmon producers; a reduction in US consumer demand caused by price increases and increased economic uncertainty; and the indirect impact on businesses such as suppliers and service providers, reports Fish Farming Expert's Chilean sister site, Salmonexpert.cl.

The study authors made the following assumptions for the calculation:

• A 10% tariff applied by the US to Chilean salmon exports reduces the price received by producers by 9%.
• A 10% tariff applied by the United States to Chilean salmon exports reduces their export volume by 15%.
• A lower global growth of 1 percentage point (pp) translates into a fall in the global imported volume of salmon (and, consequently, in the exported volume) in the short term of 0.87%.

$571m drop in export value

Based on the above, the 10% tariff on Chilean salmon would translate into a 22.7% drop in the value of salmon exports to the US, equivalent to $571 million, while the 1pp slower global growth would imply a 0.87% drop in imported (and exported) volume in the short term, equivalent to an additional $53m. Thus, the total effect, allowing for rounding, would add up to $623m (10.3% of the value of salmon exports in 2024).

After calculating the impact on the sector’s export value at $623m, the study authors then estimated that the indirect impact of the tariff would be $773m, adding up to a total impact of close to $1.4bn.

Finally, according to the same authors’ calculations, it could be assumed that at least 75% of the value chains in the salmon farming sector are highly likely to occur in the same geographic location where the direct value of production is generated, that is, in the extreme south of the country (Los Lagos, Aysén, and Magallanes). Consequently, the total impact on the extreme southern regions would be around $1.05bn.