American Samoa's largest private sector employer, Starkist Samoa, is to stop hiring new staff, and is looking at shifting some of its production offshore.
Photo: RNZI
The company says it has suffered financially due to the mandatory minimum wage increase of 40 cents an hour and is reducing investments to the local cannery.
The CEO of Starkist, Andrew Choe Photo: RNzi
It says other financial factors include access to fishing grounds and a new trade agreement which opens up competitive pressures from countries such as Vietnam.
Our correspondent in American Samoa, Monica Miller, says more than 80 percent of the economy is dependent on the canneries, so any change will have a domino effect.
"The scariest part of all was when the CEO and president, Mr Andrew Choe, has said that they are now having to evaluate and looking at alternative locations. And he came right out and said that he has informed leaders in Washington DC that they might have to shift some of the production that's now carried out at the American Samoa plant to Senegal."
Ms Miller says the territory is in a difficult situation as there's not much available to off-set any possible loss of jobs.
She says workers are worried as they wait to learn more about the company's plans.
"More than 80 percent of American Samoa's economy is dependent on the canneries, we've got the businesses that supply the fishing boats, and we also have the fuel industry, we've got the American Samoa Power Authority, this is their biggest customer, and then the American Samoa government which depends on the taxes from the employees, definitely it is going to have a domino effect on the territory."
Samoa is one of two canneries on American Samoa, and it employs about 2,000 people.
The other cannery, Samoa Tuna Processors, employs about 1,000 people.