July 9, 2018 — Donald Trump has upended global trade relationships, promising that temporary disruption will end in better terms for American businesses. Tell that to the Maine lobster industry that his policies are putting at a major disadvantage in Europe and China.
These should be halcyon days in lobstertown. Maine harvests more lobster than any other U.S. state or Canadian province. Last year it landed nearly 111 million pounds—its fourth-largest annual haul—which it sold for $450 million. The lobster industry accounts for 2% of Maine’s economy.
And China represents a hungry new market. The post-molt lobsters Maine harvests from July through November have softer shells than Canadian lobsters, so they’re lower quality. But they also sell for several dollars less a pound. In the price-sensitive Chinese market, that has given the U.S. industry a competitive advantage over its Canadian counterparts. In 2017 the U.S. exported more than $137 million in lobsters to China, up from $52 million in 2015.
Yet Mr. Trump’s unilateral tariffs are about to erode the price advantage of American lobsters. After the U.S. announced on June 15 plans to impose a 25% tariff on $50 billion in Chinese goods, Beijing retaliated with a new 25% tariff on American seafood, farm products and autos, effective July 6. That’s on top of the 10% to 15% tariffs China already imposes on U.S. and Canadian lobster.