South-Western College Publishing - Economics  
My shrimp tastes better than your shrimp!
Subject Imports of shrimp lower US prices; tariffs imposed as a result
Topic Supply and Demand; International Trade
Key Words

price, imports, tariffs

News Story

U.S. shrimp producers are trying to stop the onslaught of imported foreign shrimp by giving U.S. caught seafood a personality. Florida shrimp has "a distinctive Florida taste," while imported fish has an "iodine-y aftertaste."

U.S. shrimp producers have seen their price fall by 41% as imports have increased by 70%. Arguing that foreign imports are being dumped in the U.S. at below cost, domestic shrimpers convinced the Bush administration this year to impose tariffs as high as 67% on shrimp from Brazil, Thailand, Ecuador and India. Recently, higher tariffs were imposed on shrimp from China and Vietnam because of the surge in imports from those countries.

Domestic shrimpers are arguing that U.S. shrimp simply tastes better than imported shrimp. U.S. shrimpers and restaurant chefs argue that if the farming practices in developing countries result in erosion of the land on which the shrimp are farmed, the resulting shrimp will taste "swampy."

(Updated October, 2004)

Questions
1.

Using a graph of supply and demand in the overall US market for shrimp, illustrate the impact of increasing imports of shrimp by 70%.

2. Now, using a graph of supply and demand in the market for imported shrimp, illustrate the impact of the tariffs imposed by the US government.
3. By creating a perception that imported shrimp is not as good as domestic shrimp, what are U.S. producers trying to do in the market for imported shrimp? Illustrate using a graph of supply and demand.
Source Katy McLaughlin. "Shrimp Gets a Makeover, As Foreign Imports Rise." The Wall Street Journal, 19 August 2004, http://www.wsj.com.

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