Tariffs Hit Maine's Lobster Industry

Dealers ship millions of dollars' worth of live Maine lobster to China but much of that business may be headed to Canadian lobstermen after hefty new tariffs.

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In Maine, lobstermen have their worries - warming waters, environmental regulations, dwindling waterfront access. And now they're in the crossfire of the U.S.-China trade war. Earlier this month, China more than doubled tariffs on lobster from U.S. sources. And as Maine Public Radio's Fred Bever reports, lobster dealers, who've seen sales to China shoot up over the past decade, are now suddenly shut out.

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FRED BEVER, BYLINE: Michael Marceau watches workers pack lobster on the chilly floor of his Southern Maine business, The Lobster Co. Until last week, up to 15,000 pounds of live lobster a day passed through this facility bound for Chinese tables.

MICHAEL MARCEAU: We were gearing up for a really big year.

BEVER: With sales of Maine-harvested lobster to China this year triple what they were last year at this time, a renovation to increase the number of live lobsters the plant can hold had been underway.

MARCEAU: See that uncompleted section of pipe? Well, with that, when it was all done, we'd have been over 100,000. But we don't have to finish that now.

BEVER: That's because China's tariff on live lobster now stands at 40 percent, and 35 percent on processed lobster. It's a major price barrier for sales to Chinese buyers, who can get the same species from Canadian harvesters with only a 7 percent tariff.

STEPH NADEAU: This is instant pain - a hand grenade. It's not going to be good.

BEVER: Steph Nadeau is Marceau's wife and co-owner of the business, which employs about 18 people while taking product from dozens of lobstermen up and down the coast, and selling $13 million worth of lobster to China last year.

NADEAU: I sell 50 percent of my lobsters in mainland China. We might live through this fall. We won't live through next winter.

BEVER: Some lobstermen think it's more of a problem for the dozen or so dealers who sell to China, and less so for harvesters focused on domestic markets. They are worrying about new restrictions on their baitfish catch and whether efforts to protect the endangered North Atlantic right whale could force expensive changes in their gear.

But after aggressively developing new markets to help find a home for the record harvests of the last decade and prop up prices, some lobstermen are actually hoping that this year's haul pulls back a little.

WILLIS SPEAR: We're praying for a few less lobsters, I guess. So that will - if there's less, there'll be a bigger demand.

BEVER: Willis Spear fishes 800 traps from Portland's crowded waterfront.

SPEAR: I'm not a seance historian where we can figure out what's going to happen. We're just taking a day at a time.

BEVER: Dealers are amping up efforts to capture other Asian markets and more American consumers, too. But trade specialists say one task will be to maintain hard-won connections with Chinese partners and logistical pathways. Jeff Bennett is an analyst at the Maine International Trade Center.

JEFF BENNETT: There is too big a market just to walk away from Asia, for sure, and I don't think we can with China.

BEVER: He's hoping trade shows and personal connections will keep at least some of the business alive.

But back at The Lobster Co., Steph Nadeau says her longtime buyer in China is sending her crying-face emojis while forging new relationships with Canadian dealers. She says dealers here soon will be, quote, "beating each other's brains in" competing to unload product that would otherwise have gone to China. And she has slim hopes for a political solution.

NADEAU: I mean, this is stupid. It's like taking a sledgehammer to world trade.

BEVER: Nadeau says there will be times in the year when Chinese demand could outweigh the tariffs, but not enough to keep the business as it's been. And that, she says, will likely mean layoffs and could force her to buy fewer lobsters from boats the company's relied on for decades. For NPR News, I'm Fred Bever, in Portland, Maine.

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