Chinese tariffs will affect Maine lobster business

On Friday, China's new 25 percent tariff on lobster and lobster products went into effect. (WGME)

PORTLAND (WGME) -- On Friday, China's new 25 percent tariff on lobster and lobster products went into effect.

The tariff will add taxes onto the purchase of U.S. lobster meat by an additional $2. Some Maine-based lobster distribution companies say they will be heavily affected by the tariff.

"All places in China will go with Canadian lobsters. I have lost 100 percent of my mainland Chinese orders, and every other lobster distributor that I know how lost 100 percent of their mainland China orders," Stephanie Nadeau, President of The Lobster Company, a Kennebunkport-based distribution business said.

Nadeau says the $2 increase on U.S. distributed lobster meat will hand over the hotly contested market to Canadian distributors.

"We've spent 10 years building markets and relationships in China with our existing customers, and the harm that this does even for just two weeks will have them turn to other suppliers," Nadeau said.

The Maine Lobster Dealer's Association says that lobster is the second largest U.S. export in China, and estimates the loss of revenue at around $60 million.

"Europe and China combine to make up anywhere from 30-40 percent of our exports every year. So this will be a huge hit to the lobster industry," Annie Tselikis, Executive Director of the Maine Lobster Dealer's Association said.

Nadeau says the biggest problem is that the tariff is immediately impacting her company, and she doesn't have time to think of a new strategy.

"I'm already looking at laying off some of my employees," Nadeau said.

Tselikis says that some distributors are looking at selling lobster more aggressively in other markets.

"We are also looking at opening up new markets or expanding tertiary markets in places like Singapore, Hong Kong, Vietnam, and potentially some untapped markets like Brazil," Tselikis said.

She says that solution will take a long time. Some distributors say they might not be able to hold on that long.

"Trade policy is very complicated, typically you don't see decisions like this happen overnight, we are hopeful there will be some resolution relatively soon," Tselikis said.

"I have another half a million lobsters arriving here for shipment tomorrow. They've got to go, but where are they going to go? "I can't keep them, I can't store them, it's not some day in the future, it's today," Nadeau said.

Distributors say a tariff of this magnitude is unprecedented. They also say the tariff will likely cause a decrease in the domestic cost of lobsters as companies try to offload more and more shipments locally.

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