Live lobsters await shipment at Lobster Co. in Arundel. Exports of live lobster to China have taken a nosedive since tariffs were imposed in the summer of 2018. PORTLAND PRESS HERALD

Although “gut-punched” by a U.S.-China trade war, most Maine lobster dealers would try to recapture the China market if ongoing trade talks prove successful.

“What happens if China tariffs disappear tomorrow? I think you see a bunch of lobster companies from the United States board planes and go to China to rebuild the relationships they had with their Chinese customers,” said Annie Tselikis, director of the Maine Lobster Dealers Association. “Some may shift their practice and refocus their efforts, but … I think everybody is going to do as much as they possibly can to regain their business there.”

Chinese importers would welcome them back, too, happy to be rid of the high prices, seasonal shortages and logistical headaches of buying just Canadian lobster.

“Eventually, I think China and the U.S. should get along,” said Helen Gao, the head international buyer for Gfresh, China’s leading online seafood wholesaler. “We are the two biggest economies in the world. We should have a better trade relationship. … Right now there may be some pain, not just for U.S. suppliers, but for us, as well, because we only import seafood and U.S. is our biggest source region. We just have to hang in there.”

Tselikis and Gao tackled the thorny subject of the trade war’s impact on the U.S.-China lobster trade during an e-commerce panel discussion at the recent Seafood Expo North America in Boston. The U.S. government’s decision to levy a 10 percent tariff on Chinese seafood imports to protest alleged intellectual property theft led to a 25 percent retaliatory tariff on U.S. seafood imports that drove Chinese importers into the waiting arms of Canadian lobster dealers.

Losing the China lobster market over an international intellectual property dispute left Maine lobster dealers feeling “gut punched,” Tselikis said. While the U.S. still sold more lobsters to China than ever before in 2018 – 18 million pounds – the overwhelming majority of those sales occurred in the first six months of the year, before the seafood tariffs went into effect in July. Skyrocketing sales in the first half of the year screeched to a mere dribble in the fall and winter.


Maine lobster dealers that had invested heavily in China started cutting back, even laying some workers off, while hunting for new export markets. But the tariffs have so far left Maine lobstermen unharmed, with dock prices for lobster rising from $3.92 a pound in 2017 to $4.05 a pound in 2018, state landings data show. Canadian processing plants turned to U.S. dealers to meet their needs after the Chinese gobbled up Canadian-landed lobster.


The retaliatory lobster tariff hit Gfresh hard, too, Gao said. Her company had grown to rely on U.S. lobster imports to satisfy the appetite of China’s growing middle class, which views lobster as a celebratory food that symbolizes wealth and luck. The government has its political priorities, but the typical Chinese consumers buy food based on taste, price and safety, Gao said. Lobster from the U.S. and Canada scores high in all these categories, she said.

Chinese love fresh seafood, and live lobster is about as fresh as it can get, she said. While American lobster costs more than Canadian lobster when a 25 percent tariff is added on, the species called American lobster as a whole costs much less than rock lobster from Australia or spiny lobster from Florida and Mexico, so it is still considered an affordable luxury item, Gao said. Like most U.S. foods, American lobster passes the health and safety test with ease, she said.

The tariff prompted Chinese retailers like Gfresh to scramble to find another form of what buyers there consider to be an “entry-level” lobster product, Gao said. As Canada is not involved in the U.S.-China trade war, Gfresh and others quickly switched over to Canadian lobster suppliers, she said. But it did not take long for the Canadian fishermen to exploit their supply monopoly and raise their prices dramatically, almost matching post-tariff U.S. prices, Gao said.

Some in the Canadian lobster industry wonder if they have handled the Chinese juggernaut well – the buildup to the opening of the Nova Scotia lobster season last fall led to unusually high dock prices for Canadian fishermen, starting at $4.85 a pound before a trap was even set and jumping to $7.45 a pound three weeks later. Canadian dealers worried they were overpaying, but wanted the product in hand to be the first in line to ink a deal with Chinese buyers.


“In the bidding war that was fast and furious, did we think about our customers or even ourselves, for that matter?” asked Stewart Lamont, managing director of the Tangier Lobster Co. in Nova Scotia in his year-end write-up for the industry. “We have written the book on previous occasions for irresponsible behavior, but this takes the cake, the pie and the mincemeat tarts. … Fishers rightly concluded that we dealers are lunatics.”


Dealers in Nova Scotia, which is among the world’s most lucrative fishing grounds, say the Canadian price stabilized as more fishing areas opened. If the Chinese tariff on U.S. lobster imports is lifted, they know that some Chinese buyers will return to U.S. suppliers, especially at certain times of the year, and that more U.S. competition will likely result in lower prices, but they believe Canada will retain a share of China’s post-tariff business.

“Only time will tell where the numbers will settle out,” said Leo Muise, director of the Nova Scotia Seafood Alliance, which represents 100 seafood dealers in Nova Scotia. “The longer the tariffs stay in place, the more the balance will shift in Canada’s favor. Canada is supplying a high-quality product to China and relationships are being strengthened with every shipment.”

Although Canadian and provincial governments are investing in their lobster supply chain, expanding airports, cold storage facilities and freight forwarding service, Gao said it is still much easier for China importers to buy lobster from America than Canada. She said that some Canadian lobster dealers were even trucking their lobster shipments to U.S. airports to be loaded onto planes bound for China to avoid logistical hassles and feed China’s demand.

Some Maine dealers sold a few lobsters to China before the first of the Canadian lobster fishing territories opened in late November, Gao said. Others endured the 25 percent retaliatory tariff to get their hands on lobster during the Lunar New Year season, when Canada couldn’t harvest enough lobster to feed China’s huge appetite for a seafood that turns bright red when cooking. She jokingly told her sales team she’d have to buy a boat and land it herself.

But that frustrating seasonality has helped her maintain ties with American lobster suppliers in preparation for a day when the retaliatory tariff is no more, Gao said.

“Good friends, sometimes you have to argue, you have to fight, but eventually you’re still good friends, right?” Gao told the crowd. “We are definitely looking for our two countries, our administrations, to come to an agreement very soon.”

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