Welcome   Sponsored By
Subscribe | Register | Advertise | Newsletter | About us | Contact us
   


How Effective Have China’s Seafood Tariffs Been? Lobster case

Click on the flag for more information about United States UNITED STATES
Wednesday, April 08, 2020, 06:30 (GMT + 9)

There is a case that viruses (bird flu, swine fever, and now the coronavirus) have had almost as big an impact on Chinese-American agricultural trade as the trade war. (And more than most want to know on trade in crustaceans)

China has a reputation for responding to tariffs—even ones introduced by countries following the rules—with retaliatory tariffs of its own. And its favorite targets have long been America’s agricultural (and seafood) exports.

The actual impact of the tariff though isn’t always quite as clear as many think—tariffs of course reduce direct trade, but their impact on direct trade can be a poor measure of their actual impact.

In some cases, the workarounds have turned out to be pretty easy.The real impact depends on how easy it is for markets to adjust to the tariff. What are the workarounds? Can alternative markets be found? 

Now consider one of the more prominent—at least judging by the press coverage—industries that has been hit by Chinese retaliatory tariffs in the recent trade war: lobster. 

The fall in U.S. lobster exports to China generated stories in the Atlantic, in the Washington Post, and on PBS. And in Bloomberg too of course.

But there are, in fact, markets other than China for U.S. lobsters, and suppliers other than the United States for China. Given the large two-way trade in lobsters between the United States and Canada, the obvious adjustment would more or less be “Canada exports more lobster to China, and the U.S. exports more lobster to Canada/imports fewer lobsters from Canada.”

That’s what some lobster industry folks believe happened: “Lobster from Maine is coming into Canada and being exported to China,” says Geoff Irvine, executive director of the Lobster Council of Canada. “Everybody knows what’s happening”.

And it is a story that is reasonably well backed up in the data. Over the last two years, the “peak” in U.S. lobster exports (dollar value) to Canada rose by just under $50 million (using a trailing 3M sum). That’s roughly equal to the somewhat larger than $50 million drop off in “peak” lobster exports to China.*

As a result, China’s tariff on U.S. lobster exports didn’t have much of an impact on total U.S. lobster exports back in 2018—the bigger fall in dollar value of U.S. lobster exports came from 2014 to 2016, before the tariffs.

The story in 2019 is more complicated. 

The Maine lobster harvest was both late and small.

As a result, prices were on the high side last year—even without direct exports to China. The Portland Press Herald noted, "The average per-pound price in 2019 was a whopping $4.82, the highest since Maine began tracking lobster hauls in 1880."

That kept the dollar value of the catch up. And because of the smaller and later U.S. harvest, the United States reduced its exports to Canada a bit even as exports to China continued to fall. 

And more importantly, the United States started importing a lot more Canadian lobsters. American consumers in fact were competing with China for Canada's limited supply.

That may be a sign of thing to come if the Gulf of Maine continues to warm.

Now the coronavirus has really shut down the lobster trade—Canadian exports to China have slowed, as the virus has reduced demand from restaurants (and it also has reduced the flights that take Canadian and bootlegged American lobsters to China). Lobster prices are down, even with the “phase 1 deal.”

Of course, experts in agricultural trade know that the really big dollars aren’t in meat and seafood. The bulk of trade traditionally has been in animal feeds—and specifically in soybeans.

Soybeans wouldn’t normally be considered a good trade war target.

Soy, after all, is a commodity—Brazilian beans and U.S. beans are pretty close substitutes. And in many cases, commodity trade can sort of roll around the tariff with out much global impact.

Yet there is no doubt that China’s tariff on soy did have an impact. China reduced not just U.S. soybean exports to China in 2018, but U.S. soybean exports globally.

But it is worth noting the extreme measures China took to achieve this result.

The U.S. harvest usually ships out in the fourth quarter. China usually buys about two-thirds of the crop then. In the fall of 2018 China—through tariffs, but also through its control over state-owned oilseeds importing companies (COFCO and Sinograin) and its control over licensing for smaller private importers –brought its imports of U.S. soy down to zero.

That boycott during the normal buying season was so powerful that it led U.S. beans to trade at a discount in the global market, which is pretty clear evidence of impact. The distortions in the market were so large that the United States was even briefly shipping ‘beans to Argentina so that Argentina’s crushers could crush U.S. beans into soymeal to supply their traditional markets while freeing up uncrushed Argentine beans for China (China likes to do its own crushing).

I am sure the Trump administration got the message. It was a clear demonstration that China knows how to manage a big portion of its trade.

The lessons here—

  • When China is a big enough buyer, it can have a big impact even on commodity markets. Soybeans for example. Especially in sectors where China’s state controls the firms doing the bulk of the actual importing, and it can enforce a full boycott.
  • When China is a more marginal buyer, the impact of tariffs is likely to be smaller, particularly if there are obvious ways of getting around the tariffs.
  • Consequently, stories and studies that look only at the bilateral data can overstate the actual impact of retaliatory tariffs.
  • And biology—bird flu and swine fever—has had a large impact on Sino-American agricultural trade even before the coronavirus disrupted all trade.

* The peak in shipments to China actually comes a few months after the peak in exports to Canada. That would suggest that China imports a lot of frozen lobster, which runs a bit against the anecdotes on the “live” trade.* 

Author: Brad W. Setser/cfr.org

editorial@seafood.media
www.seafood.media


 Print


Click to know how to advertise in FIS
MORE NEWS
Peru
Jul 10, 06:00 (GMT + 9):
IMARPE Debunks Single Jumbo Squid Population Theory in the South Pacific
United States
Jul 10, 05:30 (GMT + 9):
ASMI: 2025 Weekly Alaska Salmon Harvest Update #4
Russian Federation
Jul 10, 02:30 (GMT + 9):
Russian Far East Reports Strong Start to 2025 Salmon Fishing Season
Spain
Jul 10, 01:00 (GMT + 9):
EU Debates Labeling of Plant-Based 'Fish': Fishing Sector Demands Consumer Clarity
India
Jul 10, 01:00 (GMT + 9):
IN BRIEF - Kasaragod District Earns Kerala Fisheries Excellence Award 2025
Argentina
Jul 10, 00:30 (GMT + 9):
Historic Abundance of Illex: Record 2025 Norpatagonian Squid Season
Pakistan
Jul 10, 00:10 (GMT + 9):
FAO Drafts New National Policy to Transform Pakistan's Fisheries Sector
Chile
Jul 10, 00:10 (GMT + 9):
Chile Forms Alliance for Sustainable Artisanal Jumbo Squid, Driving a Responsible Fishing Future
Spain
Jul 10, 00:00 (GMT + 9):
Other Media | La Voz de Galicia: FAO and Conxemar will dedicate the congress that preludes the fair to food security
European Union
Jul 10, 00:00 (GMT + 9):
Other Media | iPac.aquacultura: Labeling of Plant-Based Substitutes for Seafood
Viet Nam
Jul 9, 17:00 (GMT + 9):
Vietnam's Fish Cake and Surimi Exports See Continued Growth Amidst Industry Transformation
China
Jul 9, 16:50 (GMT + 9):
Youth Innovation Drives Deep-Sea Fisheries Transformation in Zhoushan
Norway
Jul 9, 08:00 (GMT + 9):
IN BRIEF - Salmon Evolution ASA: Q2 2025 operational update
Spain
Jul 9, 07:00 (GMT + 9):
Sustainable Fishing Milestone: Atlantic Coast Iberian Sardine Recovers MSC Blue Label
Chile
Jul 9, 06:00 (GMT + 9):
IN BRIEF - IFOP Reveals Key Advances in Sea Lice Control in Chilean Salmon Farming



Lenguaje
FEATURED EVENTS
  
TOP STORIES
Norwegian Seafood Exports Soar: Herring and Mackerel See Record Prices and Strong Demand in First Half of 2025
Norway Buoyed by strong international demand and strategic shifts, Norway's pelagic sector defies global uncertainties with impressive value growth Oslo – Norway's pelagic seafood sector has repo...
ALPESCAS Urges Resolution in Labor Conflict Threatening Uruguayan Industrial Fishing
Uruguay The Latin American Alliance for Sustainable Fishing and Food Security (ALPESCAS) has issued strong backing for Uruguay's industrial fishing sector amid a labor dispute triggered by the union's disrega...
Norwegian Cod Exports Navigate Quota Cuts with Record-High Prices and Strategic Market Shifts
Norway Despite significant volume drops across categories, Norway's cod industry secures unprecedented values for fresh, frozen, and cured products, buoyed by strong demand and the growing role of farmed cod...
End of an Era: Beloved US Lobster Purveyor Files for Bankruptcy After Decades of Service
United States One of New England's most celebrated seafood companies, Cozy Harbor Seafood, has filed for Chapter 11 bankruptcy. Its downfall reflects the increasing pressure on food and restaurant giants across the...
 

Umios Corporation | Maruha Nichiro Corporation
Nichirei Corporation - Headquarters
Pesquera El Golfo S.A.
Ventisqueros - Productos del Mar Ventisqueros S.A
Wärtsilä Corporation - Wartsila Group Headquarters
ITOCHU Corporation - Headquarters
BAADER - Nordischer Maschinenbau Rud. Baader GmbH+Co.KG (Head Office)
Inmarsat plc - Global Headquarters
Marks & Spencer
Tesco PLC (Supermarket) - Headquarters
Sea Harvest Corporation (PTY) Ltd. - Group Headquarters
I&J - Irvin & Johnson Holding Company (Pty) Ltd.
AquaChile S.A. - Group Headquarters
Pesquera San Jose S.A.
Nutreco N.V. - Head Office
CNFC China National Fisheries Corporation - Group Headquarters
W. van der Zwan & Zn. B.V.
SMMI - Sunderland Marine Mutual Insurance Co., Ltd. - Headquarters
Icicle Seafoods, Inc
Starkist Seafood Co. - Headquearters
Trident Seafoods Corp.
American Seafoods Group LLC - Head Office
Marel - Group Headquarters
SalMar ASA - Group Headquarters
Sajo Industries Co., Ltd
Hansung Enterprise Co.,Ltd.
BIM - Irish Sea Fisheries Board (An Bord Iascaigh Mhara)
CEFAS - Centre for Environment, Fisheries & Aquaculture Science
COPEINCA ASA - Corporacion Pesquera Inca S.A.C.
Chun Cheng Fishery Enterprise Pte Ltd.
VASEP - Vietnam Association of Seafood Exporters & Producers
Gomes da Costa
Furuno Electric Co., Ltd. (Headquarters)
NISSUI - Nippon Suisan Kaisha, Ltd. - Group Headquarters
FAO - Food and Agriculture Organization - Fisheries and Aquaculture Department (Headquarter)
Hagoromo Foods Co., Ltd.
Koden Electronics Co., Ltd. (Headquarters)
A.P. Møller - Maersk A/S - Headquarters
BVQI - Bureau Veritas Quality International (Head Office)
UPS - United Parcel Service, Inc. - Headquarters
Brim ehf (formerly HB Grandi Ltd) - Headquarters
Hamburg Süd Group - (Headquearters)
Armadora Pereira S.A. - Grupo Pereira Headquarters
Costa Meeresspezialitäten GmbH & Co. KG
NOAA - National Oceanic and Atmospheric Administration (Headquarters)
Mowi ASA (formerly Marine Harvest ASA) - Headquarters
Marubeni Europe Plc -UK-
Findus Ltd
Icom Inc. (Headquarter)
WWF Centroamerica
Oceana Group Limited
The David and Lucile Packard Foundation
Ajinomoto Co., Inc. - Headquarters
Friosur S.A. - Headquarters
Cargill, Incorporated - Global Headquarters
Benihana Inc.
Leardini Pescados Ltda
CJ Corporation  - Group Headquarters
Greenpeace International - The Netherlands | Headquarters
David Suzuki Foundation
Fisheries and Oceans Canada -Communications Branch-
Mitsui & Co.,Ltd - Headquarters
NOREBO Group (former Ocean Trawlers Group)
Natori Co., Ltd.
Carrefour Supermarket - Headquarters
FedEx Corporation - Headquarters
Cooke Aquaculture Inc. - Group Headquarters
AKBM - Aker BioMarine ASA
Seafood Choices Alliance -Headquarter-
Austevoll Seafood ASA
Walmart | Wal-Mart Stores, Inc. (Supermarket) - Headquarters
New Japan Radio Co.Ltd (JRC) -Head Office-
Gulfstream JSC
Marine Stewardship Council - MSC Worldwide Headquarters
Royal Dutch Shell plc (Headquarter)
Genki Sushi Co.,Ltd -Headquarter-
Iceland Pelagic ehf
AXA Assistance Argentina S.A.
Caterpillar Inc. - Headquarters
Tiger Brands Limited
SeaChoice
National Geographic Society
AmazonFresh, LLC - AmazonFresh

Copyright 1995 - 2025 Seafood Media Group Ltd.| All Rights Reserved.   DISCLAIMER