Trump orders assistance for lobster industry
Photo / Laurie Schreiber
A presidential memorandum signed yesterday includes the lobster industry in the federal government’s agricultural aid program.
President Donald Trump on Wednesday signed a memorandum ordering assistance for lobster fishermen harmed by tariffs imposed by China in 2018 and 2019.
The type and scope of assistance wasn’t specified. Trump met with representatives of Maine’s commercial fishing industry during his June 5 visit to Maine, saying he was going to "take care of" Maine's fishing industry.”
U.S. Sens. Susan Collins, R-Maine, and Angus King, I-Maine, and U.S. Rep. Chellie Pingree, D-Maine, said in a statement that the memorandum was “a welcome development for Maine’s hardworking lobstermen and women who are facing severe financial difficulties due to unfair retaliatory tariffs as well as the COVID-19 pandemic that has closed restaurants and reduced exports.”
The lobster industry was not included in the Trump administration’s $16 billion agricultural aid package of 2019, designed to provide relief to U.S. producers during the trade war with China
The lobster industry has an economic impact of $1.5 billion a year in Maine and is a key economic engine for coastal communities. Last year, the catch was valued at $485 million.
Prior to the tariffs, China had become the second largest importer of Maine lobster.
During 2017 — the last full year before the tariffs went into effect — Chinese customers purchased $128.5 million of lobster from Maine, and during the first half of 2018, U.S. lobster exports to China increased by 169%.
Live lobster exports to China dropped by 64% in the first month after the retaliatory tariffs were imposed.
Maine’s lobster industry has also been laboring under an 8% E.U. tariff on live lobster. That levy puts the Maine lobster industry at a competitive disadvantage compared to Canada, which enjoys tariff-free access to the E.U. market under the Comprehensive Economic and Trade Agreement.
Maine fishermen and seafood farmers have been struggling since the start of the pandemic, when domestic and export markets slammed shut.
The tariff issue started in 2018, when China imposed a retaliatory 25% tariff on American lobster. In 2019, China raised the tariff to 35%.
In 2020, China made a commitment to the U.S. to buy lobster, among other products, and also reduced the lobster tariff to 30%. But when the 30% tariff is added to China’s prevailing “Most Favored Nation” tariffs of 5% and 7%, depending on the species of lobster, the American catch currently faces tariffs of 35% to 37%.
It remains unclear whether the commitment will result in increased lobster exports.
A global market for lobster
Exports to China are particularly important because exports to the European Union, another large market for U.S. lobster, “appear to have been significantly and negatively affected by the recent implementation of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union,” the Trump administration memo to the U.S. Department of Agriculture said.
The memo directs the U.S. trade representative, beginning Aug. 15, to submit a monthly report to Trump detailing China’s progress in meeting its purchase commitments, as well as the value of monthly Maine and other U.S. lobster exports to China.
If the trade representative determines China is not meeting its purchase commitments, the memo calls for “all appropriate action to impose reciprocal retaliatory tariffs on seafood exports from China.”
With regard to the agreement between Canada and the European Union, the memo requires a report form the U.S. International Trade Commission that details any negative effects of the agreement on the U.S. lobster industry, along with recommended actions to minimize or eliminate negative effects identified in the report.
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