Chinese soy sauce. Swiss chocolate. French wine.
No import has seemed beyond the reach of President Donald Trump’s trade war. Maybe the Maryland seafood industry could finally get the White House to pay attention. Bill Sieling decided to try, again.
As executive vice president of the Chesapeake Bay Seafood Industries Association, he’s been asking for tariffs on foreign crabmeat since the late 1990s. Back then, Maryland’s historic packing houses worried about Asian imports and banded together with Virginia, Louisiana and the Carolinas to bring the fight to Washington, D.C.
Their monthslong legal battle ended in a narrow loss. In the years since, foreign competitors seized the U.S. markets, and a majority of Maryland crab companies closed.
American crabmeat has largely been replaced by cheap foreign substitutes in crab cakes, soups and dips. State officials believe a majority of Maryland restaurants serve foreign crabmeat today. Since 2018, the imported product was most likely from Venezuela.
Only now, there’s no multistate coalition agitating for tariffs. There’s no D.C. law firm to take the case. It’s just Sieling, trying to do what he can.
In May, he wrote a letter to Trump and warned of a future with only foreign crabmeat.
“We need a tariff on it of at least 100% to be able to compete on a level playing field,” he wrote.
This White House would seem to be a receptive audience. An executive order in the spring noted that “unfair trade practices have put our seafood markets at a competitive disadvantage.”
The U.S. has sanctioned the Venezuela government and declared President Nicolás Maduro’s regime illegitimate.
Still, the Venezuelan crabmeat flows in without the kind of tariffs that would make a difference to Maryland seafood.
Chesapeake seafood fights Asian crabmeat
In the late 1990s, the Maryland seafood industry still had the money and the clout to command attention.
The U.S. International Trade Commission had just determined that Chinese crawfish tails were being sold below fair market value in violation of anti-dumping laws. Encouraged by the win, Atlantic blue crab processors from Maryland to Louisiana organized to fend off the emerging threat of cheap crabmeat from Southeast Asia.
The decade had brought a surge of foreign crabmeat into the U.S. By 1999, imports had tripled to exceed 27 million pounds per year, the U.S. processors told the commission, citing federal trade data.
Advertised as “blue swimming crab,” the speckled crabs live in warm coastal waters of the South China Sea and around the Philippines. They are a different species from the Chesapeake Bay’s famous blue crabs. The foreign crabmeat was pasteurized and canned to make the trip around the world.
A driving force in this new industry was a familiar name on the East Coast: Phillips Seafood.
From a packing house on Hoopers Island that opened in the early 1900s, the family-owned business had grown into Maryland’s premier seafood company with restaurants in Ocean City, Baltimore and D.C.
To supply the empire, Steve Phillips, the founder’s grandson, turned to the speckled crab known as “kasag” around the Visayan Islands of the Philippines. By 1999, the company employed 10,000 workers at eight processing plants across the Philippines, Indonesia and Thailand, The Baltimore Sun reported.
Phillips’ success provoked criticism that the company was intentionally blurring distinctions between foreign and domestic crabmeat. The company did not return messages from The Banner.
The matter came to a head in March 2000, when 27 domestic crab processors from Maryland to Texas, calling themselves the Blue Crab Coalition, hired a D.C. law firm and petitioned the U.S. International Trade Commission to investigate foreign crab imports.
They argued that the import companies were cashing in on consumer confusion, and that domestic processors couldn’t compete against the low wages of overseas workers. At the time, foreign pasteurized crabmeat cost almost 40% less than fresh Maryland blue crab.
They wanted President Bill Clinton to place tariffs or quotas on foreign crabmeat.
Phillips Seafood led an opposition group calling itself the Coalition for the Free Trade of Crabmeat, with allies ranging from the National Restaurant Association to the late U.S. Rep. Elijah Cummings.
In a letter to the commission, Cummings wrote that Phillips had transformed a vacant building in Baltimore into a bustling factory with hundreds of jobs.
“I greatly fear that imposition of any restrictions would cause Phillips to decide to relocate its facility overseas,” the congressman wrote.
Gov. Parris Glendening found himself caught in the middle when the Maryland packing houses asked for $100,000 to help their legal fight. The governor declined after consulting Phillips, instead directing the money to an advertising campaign that promoted Maryland crabmeat.
In August 2000, the trade commission voted to deny help to U.S. crab processors, concluding that domestic companies were not seriously injured or threatened by foreign imports.
The commissioners noted that fresh Atlantic crabmeat catered to a specialized market, not the big restaurants and food distributors that bought pasteurized crab from overseas. Therefore, domestic producers held some advantage yet.
“I wouldn’t have this business if they had gone against us,” Steve Phillips told the Washington City Paper four years later.
Venezuelan crabmeat pushes in
Jack Brooks, of the historic J.M. Clayton Seafood Co. in Cambridge, has watched Maryland’s seafood industry shrink from about 50 crab processors to fewer than a dozen within a generation.
The local companies face challenges beyond foreign competition, chiefly, with the H-2B visa program. Imagine trying to run a business when you need to win a lottery to hire a workforce. Still, the industry has blamed a cheaper, new competitor for hastening its decline.
In 2018, Venezuela eclipsed the Southeast Asian countries to become the largest source of crabmeat imported by the U.S., according to an analysis of trade data by Mark Newman, of Market Solutions LLC. He examined crabmeat imports as part of a 2023 study for the Maryland Sea Grant, a program within the state university system.
The Venezuela crab industry centers in the country’s northwest corner, within the gulf and the brackish waters of Lake Maracaibo. An inlet of the Caribbean Sea, actually, the lake is more than 100 miles long and is famous as one of the largest reserves of gas and oil in the world.
Whereas the distant Asian crabmeat was mostly pasteurized for its long journey, Venezuelan crab was flown in fresh to Florida. Worse yet for Maryland seafood companies, the coastal waters of Venezuela provided “Callinectes sapidus,” the same blue crab species found in the Chesapeake Bay.
Maryland’s industry had lost the advantage it held against Asian imports. At Graul’s Market over the weekend, jumbo lumb crabmeat from Venezuela cost $21 less than from Maryland.
“They sell it at times for a third of what it costs us to produce,” said Brooks, of J.M. Clayton Seafood. “It’s a very attractive alternative for restaurants.”
Indeed, Maryland restaurants embraced the new pipeline of fresh crabmeat. Many diners couldn’t tell the difference.
“I’ve lost customers because it’s so much cheaper,” said Janet Rippons-Ruark, of Rippons Brothers Seafood, known for the Wind Mill brand of Chesapeake crabmeat. “But it’s not the same standard.”
The wreckage of Venezuela’s oil industry has left Lake Maracaibo a polluted wasteland and the crabs had to be scrubbed clean, the Associated Press reported.
In July 2018, Maryland health officials warned against eating fresh Venezuelan crabmeat after an outbreak of illness from the bacteria vibrio.
The Venezuela seafood industry responded by adopting high-pressure processing, a method that submerges packages of fresh crabmeat in high-pressure water to kill pathogens. The technology also extended the shelf life for a tub of fresh crabmeat to as many as 21 days.
“You could have crabmeat coming from Venezuela that lasted longer than domestic crabmeat that was caught and picked and retailed in Maryland,” Newman said.
With the extended shelf life, Venezuelan imports took off. Newman estimates imports exceeded domestic production by a scale of about 8-to-1 in 2022. That same peak year, a Venezuela news site reported that crab had jumped oil to become the country’s leading export to the U.S.
Venezuela’s Zulia state encompasses a majority of Lake Maracaibo’s shoreline. There are 18 crab processing plants operating in Zulia alone, according to a government report online. The region’s crab industry employs at least 13,000 people.
Today, the U.S. imports about $55 million of crabmeat a year from Venezuela, Newman said.
It’s still one of Venezuela’s biggest U.S. exports.
Silence on crab tariffs
The scale of the foreign industry and the low cost of its crabmeat have raised suspicions of unfair trade practices.
Venezuela grapples with extreme inflation, and the country has restricted the free exchange of foreign currency.
The U.S. has sanctioned the Maduro government and offered $50 million for information leading to the Venezuelan president’s arrest on federal narcoterrorism, drug and weapons charges.
Trump threatened a 25% tariff on any country that buys Venezuelan oil, while Maduro accused the U.S. of waging economic war.
“They want the American dollars,” Sieling said. “They’re dumping this crabmeat here in our market way below cost.”
Last October, 11 members of Congress from Maryland and Virginia wrote President Joe Biden to urge the U.S. International Trade Commission to investigate Venezuelan crabmeat imports.
Meanwhile, foreign countries that export seafood to the U.S. are supposed to submit documents showing they have regulations to protect whales and other marine mammals. Venezuela, Iran, Haiti and Benin missed the deadline to respond and face the possibility that their seafood could be banned next year.
The foreign crabmeat importers are represented in Washington by a powerful seafood industry trade group. The National Fisheries Institute spends about $800,000 a year lobbying, records show. This year, and in the years of the first Trump administration, the institute employed lobbyist Jeff Miller, who has close ties to Trump and other Republican leaders. His firm has reported lobbying on seafood tariffs.
Gavin Gibbons, the chief strategy officer for the National Fisheries Institute, blamed the hard times facing Chesapeake crab processors on other factors, including the limited number of H-2B worker visas, unpredictable swings in crab stocks and the invasive, crab-hungry blue catfish.
“Rhetorically, tariffs are a feel-good tonic that actually do nothing to address the concerns facing this fishery,” he wrote in an email.
Fewer people would eat crab if there was only Maryland’s catch, Gibbons added.
“There is simply not enough of it to effectively and economically feed 330 million people,” he wrote. “Global sourcing helps keep crab on American plates.”
In April, Trump declared “Liberation Day” and announced a baseline 10% tariff. He imposed a slightly higher rate of 15% on a second tier of counties, including Venezuela. That’s still less than his tariffs on Canada, Brazil, Switzerland and other U.S. allies.
A federal appeals court struck down some of these tariffs, but allowed them to remain in place while Trump takes the fight to the Supreme Court.
“Why is it that Venezuela only has a 15% tariff?” Sieling said. “All of our friends, we’re putting four and five times the tariff.”
In response to questions about Venezuelan crab imports, a White House spokesman told The Banner that the Trump administration has prioritized U.S. seafood industries by deregulation and trade deals that open up foreign markets.
The executive actions, however, don’t directly address the biggest threats to Maryland crabmeat.
“The Administration continues to raise unfair trade practices with other countries to level the playing field for American seafood producers, including Maryland crabbers,” White House spokesman Kush Desai wrote in an email.
Sieling, for one, believes their arguments are more persuasive than ever for trade relief. U.S. crab processors, however, don’t have the money to hire a D.C. law firm and petition the trade commission all over again.
Instead, he wrote his letter to Trump and waited. He watched the country debate higher tariffs on everything from Canadian lumber to Japanese cars. Four months have gone by.
“Zero. No response,” he said.
Banner reporter Daniel Zawodny contributed to this article.
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