Japan's scallop exports plunge as tariffs hinder supply chain

Japan's scallop exports suffered a significant decline in 2023, dropping by 24% from the previous year to ¥68.9 billion. This drop comes on the heels of declining sales with China, which had historically been a major destination for these exports. The ban imposed by Beijing on Japanese fisheries products in August 2023, following the Fukushima nuclear power plant's release of treated water, contributed heavily to this downturn. Prior to the ban, most Japanese scallops were processed in China before being sent to the U.S. market. Without this processing opportunity, Japanese exporters found themselves in a difficult position. In an effort to adapt, the Japan External Trade Organization (JETRO) initiated plans to develop a new supply chain for scallops that would involve processing in Ensenada, Mexico. However, this initiative now faces serious challenges. With the administration of U.S. President Donald Trump reinstating steep tariffs on imports from Mexico, businesses are hesitant to invest in this new supply chain, creating uncertainty about its viability. There have been official visits to the proposed processing site by representatives from 14 Japanese companies, as JETRO aims to establish a fresh logistical route for scallops by 2024. Compounding these difficulties, poor scallop catches, likely linked to the effects of global warming, have added doubt to the future of the supply chain and the overall scallop industry in Japan. The ongoing geopolitical tensions, particularly between Japan and China as well as the implications of tariffs, cast further shadows over the prospects of Japan's fisheries sector. While the recent announcement from China lifting its ban on Japanese fishery products was initially received positively, exporters remain wary of the risks associated with relying heavily on the Chinese market. Despite these significant hurdles, JETRO officials maintain that processing in Mexico remains a feasible option. However, the combination of government policy restrictions, economic uncertainties, and climate-related challenges places the future of Japan's scallop supply chain in jeopardy. The events of the past year illustrate a complex interplay of domestic and foreign issues that stakeholders in the Japanese scallop industry must navigate.