South Florida Sun-Sentinel Palm Beach (Sunday)
Chinese tariffs take a bite out of U.S. lobster industry
PORTLAND, Maine — The American lobster industry is starting to feel the pinch of China's tariff on U.S. seafood as exporters and dealers cope with sagging prices, new financial pressures and difficulty sending lobsters overseas.
China is a major buyer of lobsters, and it imposed a heavy tariff on exports from the United States in early July amid trade hostilities between the superpowers. U.S. exporters said their business in China has dried up since then.
Wholesale prices for live lobsters have also dipped as dealers have lost markets. Prices in July and August were slightly less than the same month in the previous year, business publisher Urner Barry reported.
One exporter, The Lobster Co. of Arundel, Maine, resorted to laying off four people, which constituted 25 percent of its whole- sale staff, said Stephanie Nadeau, the company's owner. “I can cut my variable costs and tuck my head in and see if this storm passes,” she said. “What they've done is made it so everybody is fighting over the remaining customers. Price goes down, margins go down.”
China applied the tariffs to a suite of U.S. seafood products, including tuna and crab. It made the move at a time when many Chinese are acquiring a taste for American lobster. China's American lobster imports grew from $108.3 million in 2016 to $142.4 million last year, and the country barely imported any American lobster a decade ago.
The numbers are already starting to tail, as China's July lobster imports from the U.S. were down more than $2 million this July compared with July 2017, according to statistics from the National Oceanic and Atmospheric Administration.
China isn't dependent on the U.S. for lobster because the coun- try can increase its imports of the same product from Canada. That is worrisome for the lobster industry because it could hurt American business, as well as change the logistics of the worldwide supply chain, said market analyst John Sackton, founder of SeafoodNews.com.
Changes could be especially hard on lobster businesses in Maine, where the lobster industry is based, Sackton said. “I think there is a real issue, and the Maine industry is likely to get hurt,” he said.
The industry will learn more about the toll of the tariffs later in the year, when most of the shipping overseas takes place, said Emily Lane, who works in marketing and exporting for Cape Seafood in Saco, Maine.
“I think we're still looking at what the impact is going to be,” she said. “I've had some customers point out I'm not as competitive in the market due to the tariffs they have to pay.”