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US Lobster Exports To China Plunge Amid Escalating Trade War

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Via Zerohedge

VOA News interviewed a business owner and a trade official in Maine following a massive drop in lobster exports due to President Trump’s escalating trade war. Their comments on the trade war are an eye-opener that contradicts the president’s claim that his trade duties on China won’t hurt American firms.

VOA spoke with Vice President of sales and marketing at Maine Coast, Sheila Adams, who said her company saw a 20% plunge in business activity in a matter of days last July after China retaliated against US tariffs on Chinese goods by raising duties on US food and agricultural exports, which included live lobsters.

Essentially what’s happened is about 80% of our sales into mainland China have gone away,” she said.

“And that’s purely because our product is simply just too expensive compared to the Canadian because of the additional 25% tariff that was levied.”

The 25% tariff paid by Chinese consumers was enough of a price shock that sent most of Maine Coast’s Chinese clientele north into Canada for cheaper, un-tariffed lobster.

“The North American lobster is caught in US waters, but also in Canadian waters,” Adams said. “So when they make a buying decision between ‘Do I want to buy a lobster out of Canada or do I want to buy a lobster out of the United States?’ it becomes very difficult for them to make a decision to buy an American lobster because it’s so much more expensive.”

“The Chinese as a culture love live seafood in general, and have a particular passion for live lobster,” she explained.

“Obviously it’s a very large country, with a lot of people, so they consume — or have the ability to consume — a lot of lobster, which is important for us as a wholesaler volume business.”

Adams and her team had to quickly shift sales channels out of China to new markets across Asia. Her facility can process, package, and prepare fresh lobsters for 29 countries weekly, but with the Chinese market obsolete at the moment, business activity has slumped.

“It takes all of those other countries combined to equal one market in mainland China. So we had to put a tremendous amount of effort across many, many markets to try to recoup the lost business in China,” Adams said.

Wade Merritt, president of the Maine International Trade Center, and director of international trade for the state of Maine, told Voa that Maine Coast is a good example of how President Trump’s tariffs impacted the local economy and penalized small businesses.

“We were up about 170% from January to June of 2018 — that was prior to the tariffs,” Merritt said. “But by the end of the year, Maine’s exports of live lobster to China had actually declined by almost 7%. So we gave up a lot of ground in a very short amount of time in those six months.”

Merritt said overall exports of live lobster to China from Maine had crashed 82% between 2018 and 2019. “So it has had a significant impact on that industry.”

“Think about the corner store, or the gas station, or the schools, or the anything in any of these communities that is a major lobster fishing port,” Merritt said. “If they’re not fishing lobsters, then there is a real problem for those other businesses too. So there are definite ripple effects that cascade down through the economy.”

Tariffs Hurt the Heartland, an alliance of trade associations and agriculture commodity groups, said tariffs cost US firms $3.4 billion in June alone.

Trump has stated that he can get a better deal with China by waging a trade war against them as a negotiating tactic, but at this point, it has widely backfired. American businesses that are suffering from the trade war could be the next recessionary shock in 2020.



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