Lobster industry pinched by tariffs

TIM JEAN/Staff file photo/ China Central Televison correspondent Zhu Xili, center, and camera operator Mu Lyu, left, film Vince Mortillaro, owner of Mortillaro Lobster Company in Gloucester in January, before recent tariffs went into effect. Mortillaro demonstrated how his company ships live lobsters to China. 1/31/19 

BOSTON — The trade war with China is putting the squeeze on the state's lobster industry, and the damage is seeping into other sectors of the seafood economy, lawmakers were told Tuesday.

China has imposed 35% tariffs on U.S. lobsters — and many other food products — over the past year amid rising trade hostilities with the United States.

As a result, U.S. lobster exports to China have fallen off a cliff, dropping by 80% since its retaliatory tariffs went into effect.

The pain is being felt in Massachusetts, the nation's second-largest market, where lobster sales to China plummeted 62% in the past year, according to state export officials.

"Canada is experiencing a boom in lobster sales as Chinese buyers find alternative markets," Mark Sullivan, executive director of the state Office of International Trade and Investment, told members of Legislature's Committee on Export Development on Tuesday. "Cargo planes are coming into Halifax, Nova Scotia, and New Brunswick to handle this bump in growth."

Vince Mortillaro, owner of Mortillaro Lobster Inc. in Gloucester, told lawmakers his sales to China have dropped about 25% since the tariffs went into effect, with losses estimated at more than $6 million. He's had to lay off employees and trim costs, and expects to loose about 30 percent of his sales when the books close on the year.

"We spent $3 million on infrastructure and six months later we're hit with all these tariffs," he told the committee. "So, it's a pretty hard pill to swallow."

Massachusetts boasts the nation's second-largest lobster harvest after Maine, about 11% of the U.S. total. Gloucester is the state's No. 1 lobstering port, and Rockport is in the Top 5.

America has exported less than 2.2 million pounds of lobster to China this year through June, according to data from the federal government.

The country exported nearly 12 million pounds during that same period last year. That’s a more than 80% drop.

Unlike farmers, who have been offered a $16 billion bailout to compensate for income lost in the trade war, the Trump administration hasn't throw a life-line to commercial fishermen.

The state Legislature's export committee, co-chaired by Rep. Lori Ehrlich, D-Marblehead, is exploring what the state government can do to help the struggling lobster industry survive the trade war.

State Rep. Ann Margaret Ferrante, D-Gloucester, said the trade wars are hurting not just lobstermen but other sectors of the seafood industry connected to it, such as processors, wholesalers, supermarkets and restaurants.

"The lobster is commodity that feeds a chain of industries," she said. "You're talking about a supply chain of about five industries that are going to take a serious hit."

Ferrante said the state needs to find a way to help the struggling lobster industry weather the impact of the trade war.

"If the bio-tech industry came here today and said, 'Hey, guess what, people put a 40% tariff on us,' we would be scrambling in this building to figure out what to do," she said.

In Congress, U.S. Rep. Seth Moulton, D-Salem, has filed legislation to expand disaster relief to fisheries — such as the New England lobster industry — harmed by the retaliatory tariffs.

Members of the state's congressional delegation, including Moulton and Sen. Elizabeth Warren, wrote to the Trump administration on Monday urging officials to explore new overseas markets for lobster sales.

"While Massachusetts state legislators are exploring solutions for economic relief at the state level," the letter read, "it is imperative that there be federal resolve to assist the Massachusetts lobstermen whose livelihoods heavily relied on exports to China."

Still, Mortillaro points out, there are few places in the world where there's a demand for lobsters that isn't being already met.

"People keep talking about spending more money to find new markets. There isn't any new markets," he told the committee on Tuesday. "Everywhere lobster can go, it goes."

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhi.com.

 

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