“Life is like a box of chocolates. You never know what you’re gonna get.” — Forrest Gump
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Most economists believe that tariffs will make doing business harder by either forcing U.S. companies to swallow higher costs or raise prices and risk losing consumers. But there’s hope that at least one industry could massively benefit from tariffs and that is shrimp.
America loves its shrimp—making it the top-consumed seafood type—but it imports about 94% of its shrimp, with most of it coming from India, Ecuador, and Indonesia, because it’s significantly cheaper to do so.
Imported shrimp is so engrained into American society that even when you go to an ocean-view restaurant, adorned with photos of boats and local catch, it’s rare for a restaurant to serve fresh shrimp.
Though shrimp is a very small industry compared to the likes of steel or defense, what happens to it is important to watch. That’s because efforts to revive the floundering industry could serve as a blueprint for how President Donald Trump could help other local economies and industries that were decimated after becoming too dependent on one trade.
Imported shrimp became a problem in the early 2000s when companies tried to turn the luxury food item into the next chicken. Domestic shrimpers along the Gulf just couldn’t compete with imports, which drove down the price of a pound of shrimp to as low as $1.50 for some varieties, from $3.03 in August 2021, at the same time the costs of diesel fuel and supplies surged, WSJ reported. (American consumers do not seem to have noticed that shrimp imported from places like India often have a softer, mushier texture compared to the American variety.)
Unlike trying to onshore tech manufacturing, trying to scale up our own shrimp production might be easier. Putting that in perspective, to build a factory where chips are made, it could cost anywhere between $10-$20 billion and also take longer to staff it up to operational status compared to Taiwan.
Still, there are worries about how we could possibly grow or catch the amount required to satisfy America’s shrimp craving. And though prices for imported shrimp might go up with tariffs, so will prices of domestic shrimpers’ nets and cables, which are also imported.
A bigger hurdle, in my opinion, would be convincing young workers to be shrimpers. It’s blood-sweat-and-tear work, with shrimpers gone for weeks. This is a key topic to the ongoing manufacturing revival, too, as economists wonder whether young people want to work labor-intensive jobs in favor of sitting at a desk for a 9-5.
It remains to be seen whether high prices can revive shrimping and once again make it a hallmark of the Bayou La Batre like it once was in the Forrest Gump movie. So far, shrimpers in America are cheering, while those in India are suffering losses.
“It’s game over” for the Indian industry if the tariff rate of 26% takes effect in July, said one shrimp exporter to Reuters, who spoke on condition of anonymity.
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Catch up with FS Insight
This week was about earnings (positive) and macro and markets are in a better place now than a week ago, and two weeks ago.
Technical
While trends remain positive, I expect that the road likely gets a bit tougher from here over the next month before beginning a more sturdy uptrend.
Crypto
We discuss Schwab and Morgan Stanley entering crypto, fresh treasury demand for SOL, MicroStrategy’s new $21B offering, and why negative funding plus bullish flows signal potential for more upside ahead.
News We’re Following
Breaking News
- US Added 177,000 Jobs in April, Topping Forecasts BBG
- Harvard’s Tax-Exempt Status to Be Revoked, Trump Says WSJ
- Russia’s war in Ukraine ‘not going to end any time soon,’ JD Vance says CNBC
Markets and economy
- Warren Buffett, Mum So Far on the Trade War, Steps Up to the Mic WSJ
- Microsoft wins Big Tech’s first earnings battle since Donald Trump’s tariffs FT
Business
- Goldman Sachs Removes Mentions of ‘Black’ From Flagship Diversity Pledge WSJ
- Airbnb issues disappointing revenue guidance for second quarter CNBC
- Take-Two pushes back release of ‘Grand Theft Auto VI’ to 2026 FT
Politics
- President Trump orders Corporation for Public Broadcasting to end federal funding for NPR and PBS CNN
- Marco Rubio, Secretary of Everything NYT
- These judges ruled against Trump. Then their families came under attack. RT
Overseas
- How China is quietly diversifying from US Treasuries FT
- China shipments set to plummet as US ‘de minimis’ loophole ends SEM
Of Interest
- Nvidia CEO Jensen Huang gets first salary raise in a decade CNBC
| Overnight |
| S&P Futures +18
point(s) (+0.3%
) Overnight range: -22 to +51 point(s) |
| APAC |
| Nikkei +1.04%
Topix +0.31% China SHCOMP flat Hang Seng +1.74% Korea +0.12% Singapore +0.33% Australia +1.13% India +0.08% Taiwan +2.73% |
| Europe |
| Stoxx 50 +1.24%
Stoxx 600 +0.91% FTSE 100 +0.7% DAX +1.51% CAC 40 +1.4% Italy +0.93% IBEX +0.56% |
| FX |
| Dollar Index (DXY) -0.53%
to 99.72 EUR/USD +0.56% to 1.1353 GBP/USD +0.28% to 1.3315 USD/JPY -0.61% to 144.5 USD/CNY flat at 7.2714 USD/CNH -0.72% to 7.2267 USD/CHF -0.92% to 0.8221 USD/CAD -0.34% to 1.3807 AUD/USD +0.94% to 0.6443 |
| Crypto |
| BTC +0.27%
to 96723.21 ETH -0.78% to 1825.78 XRP -0.21% to 2.2114 Cardano +0.07% to 0.7063 Solana -0.32% to 149.78 Avalanche -1.09% to 21.41 Dogecoin -0.06% to 0.1805 Chainlink -1.39% to 14.69 |
| Commodities and Others |
| VIX -2.11%
to 24.08 WTI Crude -0.66% to 58.85 Brent Crude -0.56% to 61.78 Nat Gas -1.12% to 3.44 RBOB Gas -0.61% to 2.037 Heating Oil -0.21% to 2.008 Gold +0.76% to 3263.92 Silver +0.33% to 32.52 Copper +0.96% to 4.625 |
| US Treasuries |
| 1M -3.4bps
to 4.2549% 3M -2.5bps to 4.2658% 6M -0.9bps to 4.1796% 12M -2.5bps to 3.8948% 2Y -1.3bps to 3.686% 5Y -1.0bps to 3.7934% 7Y -1.3bps to 3.9896% 10Y -1.6bps to 4.2019% 20Y -2.0bps to 4.7164% 30Y -1.7bps to 4.706% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 3.2bps to -63.7
bps 10Y-2 Y Spread narrowed 0.3bps to 51.2 bps 30Y-10 Y Spread widened 0.1bps to 50.2 bps |
| Yesterday's Recap |
| SPX +0.63%
SPX Eq Wt -0.14% NASDAQ 100 +1.1% NASDAQ Comp +1.52% Russell Midcap +0.07% R2k +0.6% R1k Value -0.14% R1k Growth +1.22% R2k Value +0.54% R2k Growth +0.66% FANG+ +2.22% Semis +0.48% Software +0.98% Biotech -0.54% Regional Banks +1.11% SPX GICS1 Sorted: Tech +2.21% Comm Srvcs +1.55% Cons Disc +0.99% Indu +0.7% SPX +0.63% Energy +0.37% Utes +0.3% REITs +0.15% Fin -0.08% Materials -0.5% Cons Staples -0.78% Healthcare -2.79% |
| USD HY OaS |
| All Sectors -12.8bp
to 421bp All Sectors ex-Energy -12.0bp to 376bp Cons Disc -11.8bp to 419bp Indu -12.6bp to 315bp Tech -21.4bp to 385bp Comm Srvcs -15.0bp to 601bp Materials -13.9bp to 398bp Energy -13.5bp to 480bp Fin Snr -10.8bp to 347bp Fin Sub -2.7bp to 295bp Cons Staples -9.9bp to 290bp Healthcare -12.7bp to 426bp Utes -9.7bp to 288bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 5/2 | 8:30AM | Apr AHE m/m | 0.3 | 0.3 |
| 5/2 | 8:30AM | Apr Unemployment Rate | 4.2 | 4.2 |
| 5/2 | 8:30AM | Apr Non-farm Payrolls | 138.0 | 228.0 |
| 5/2 | 10AM | Mar F Durable Gds Orders | 9.2 | 9.2 |
| 5/5 | 9:45AM | Apr F S&P Srvcs PMI | 51.4 | 51.4 |
| 5/5 | 10AM | Apr ISM Srvcs PMI | 50.2 | 50.8 |
| 5/6 | 8:30AM | Mar Trade Balance | -122.0 | -122.662 |
| 5/7 | 2PM | May 7 FOMC Decision | 4.5 | 4.5 |
| 5/8 | 8:30AM | 1Q P Nonfarm Productivity | -0.5 | 1.5 |
| 5/8 | 8:30AM | 1Q P Unit Labor Costs | 5.35 | 2.2 |
| 5/8 | 11AM | Apr NYFed 1yr Inf Exp | n/a | 3.58 |