Bob Baines does not believe new foreign tariffs will have an immediate impact on the Maine lobster industry.
“The state is catching mostly new-shell lobsters that don’t ship well to China or the EU yet,” he said, plucking a few twisting lobsters from his haul to display the small number mature enough for an overseas voyage.
That won’t last, Baines said, and harder shells will come with more difficult trade barriers.
Moving quickly around the deck of his lobster boat Thrasher, Baines unloaded flat crates of live catch onto a dock adjacent to the Spruce Head Fisherman’s Co-Op, where he serves as president of the South Thomaston nonprofit that brokers sales for more than 40 dues-paying members.
Tariffs will undoubtedly affect prices as fall approaches, Baines concluded, and the lobster dealers he has spoken to are not happy.
“The international market is very important to the Maine lobster industry, and any loss in market means a lower price to the lobstermen, which directly affects our profit,” he said.
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Costs from retaliatory tariffs on steel and aluminum, could trickle down to Maine’s lobstermen. However, a Massachusetts mesh wire company says they have not increased prices to ‘support’ the lobster industry.
“The effects of the tariffs have been narrow, but have been deep,” said Wade Merritt, the C.E.O. of the Maine International Trade Center. “It’s a bit of a canary in the coal mine for the rest the state’s economy, right? We are starting to see the impacts in different ways, whether it’s manufacturers using steel and aluminum, but also the fact that the lobster industry really underpins a lot of Maine’s rural and also some urban communities.”
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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.
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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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.
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Maine businesses are largely unscathed by the new tariffs China is imposing on U.S. products. But there’s one big exception – lobster.
Wade Merritt, the president of the Maine International Trade Center, says early salvos in the developing trade war between the U.S. and China didn’t seem too bad. But the tariffs China just announced came on like a summer thunderstorm, and they will hit about one-quarter of all of Maine’s exports abroad.
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A new analysis by the U.S. Chamber of Commerce shows that roughly $130 million of Maine exports are threatened by new tariffs already imposed or threatened by China, the European Union, Mexico and Canada on American-made products in retaliation for new tariffs imposed by the Trump administration.
To put that in context, the Maine International Trade Center reported that last year, 2,262 Maine companies exported $2.7 billion in goods and services to 176 countries. Trade supports 180,500 (nearly 1 in 4) Maine jobs, according to MITC, and Maine jobs related to trade have increased by 25.9% since 2009, while overall job growth was just 0.3% in the same time frame.
The U.S. Chamber — which is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors and regions, as well as state and local chambers and industry associations — compiled its analysis using data on state exports from the U.S. Department of Commerce and data on U.S. exports subject to foreign tariffs from the official government sources of China, the EU, Mexico, and Canada.
“The analysis shows how much of each state’s exports are threatened by retaliatory tariffs, highlights each state’s hardest-hit products, and shows the total number of jobs supported by global trade in each state, illustrating exactly what American families and consumers stand to lose in a potential trade war,” the chamber stated in a news release accompanying its analysis.
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As retaliatory tariffs go in place, the highly integrated economies between the neighbors insulate most companies from ill effects.
Maine will escape the first round of a trade war with Canada with a glancing blow.
Roughly $67 million worth of Maine products will be exposed to retaliatory Canadian tariffs set to go into effect July 1, in response to import taxes on steel and aluminum from the Trump administration.
That accounts for less than 6 percent of Maine’s total export value to Canada in 2017 and places Maine among the states least affected by the bilateral trade war.
Even though Canada’s countermeasures cover a spectrum of Maine-made goods, such as boats, salad dressing, greeting cards, prepared chicken and maple syrup, they spare much more critical commodities such as lobster and lumber used by industries that straddle the Maine-Canada border.
And that intimate economic relationship between Maine and its northern neighbor could insulate the state from a deeper trade dispute, according to experts.
“I would say we largely got off easy,” said Wade Merritt, director of the Maine International Trade Center. “This to me looks like we are sort of collateral damage to measures taken against other parts of the country.”
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The Maine lobster industry is reeling at the prospect of losing its biggest overseas market.
Industry leaders warn that a proposed 25 percent Chinese tariff on U.S. lobster exports will drive U.S. lobster prices down, causing untold harm to an industry that was counting on China to offset market losses in Europe caused by a trade deal between Canada and the European Union.
When the American lobster industry hurts, Maine’s economy does, too.
“This is going to hurt everybody connected to the lobster industry,” said Annie Tselikis, director of the Maine Lobster Dealers Association. “The lobsterman and lobster dealer, yes, but every single person we do business with. In Maine, that’s almost everybody.”
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Saying lobster is critical to jobs in Maine, generating $1.5 billion in economic activity, Maine’s four congressional representatives met with federal trade officials in Portland Friday.
While none of the representatives said they expected any deal to result from the meeting with the U.S. Trade Representative delegates, they said they hoped to open a direct line of communication on the state’s lobster industry. They met with the press before the closed-door meetings.
U.S. Sen. Angus King, I-Maine, said he also hoped to get lobsters included in ongoing U.S.-European Union talks about beef trade.
“There are ongoing discussions between the European Union and the United States over beef exports and imports,” King said. He said he’d like to have lobster included in a “surf and turf” discussion.
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Yale Cordage, a Saco company that makes a wide range of specialty ropes for key industries such as mining and arboriculture, took home the “Best in Show” trophy at Trade Day 2018 for a new product that it says is “as strong as steel, as flexible as rope and as malleable as putty.”
Manufactured by Resin Fibers, a subsidiary of Yale Cordage, the winning product is called Braeön — a lightweight thermoplastic ribbon that molecularly fuses to itself and has been tested and proven to withstand extreme force and conditions.
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