There is a feeling of chaos among Canada’s lobster industry with tariffs now on imports to their second biggest client – China.
Geoff Irvine, the Executive Director of the Lobster Council of Canada, tells our newsroom the industry is extremely concerned.
“It’s a lot of uncertainty coming into this very, very busy spring season. Harvesters and the plants are all making business decisions, talking to their customers, trying to figure out where they need to be in terms of pricing and products.”
He says even though we know what the tariffs are from China, that combined with uncertainty from the U.S., who is their biggest customer, makes planning for the season very, very difficult.
A double whammy
China has slapped a 25 per cent tariff on Canadian seafood that is scheduled to come into effect March 20.
Tariffs on most Canadian goods from the United States are currently on pause but are scheduled for April 2, with a 50 per cent duty on aluminum and steel to be in effect, Wednesday.
Irvine says they had hoped the China market would be a buffer for them from the U.S. tariffs, but now it’s not looking good.
“Consider that last year we exported $2.9 billion worth of lobster frozen and live …$1.9 billion went to the U.S. and 500 million and change went to China. That’s $2.4 billion out of $2.9 billion going to two markets. You could just imagine what that’s doing to people.”
How much will prices jump?
Irvine says it’s pretty simple.
If the tariff is 25 per cent, then that is how much the cost of lobster will rise.
However, he says, the question is whether or not the market will accept it.
“We’ve heard from the U.S. that some customers are saying no. I’m sure there will be negotiations in both of the markets to see sort of where it all shakes out. So, those conversations will be ongoing as we get into the spring seasons.”
Irvine says he’s worried whether or not they will even be able to sell everything they process or catch but considering how fast things are moving it’s hard to keep up.
“On top of all of this we’ve economic chaos in America, our biggest customer. If they go into recession and there’s massive layoffs there, what appetite will people have to buy lobster anyway?”
Consistency in Ottawa
Prime Minister-designate Mark Carney was just voted in as the new federal Liberal Leader Sunday, after Justin Trudeau stepped down.
Irvine says our political situation in Ottawa and lack of consistency from who is making decisions, is not helping.
“It’s sort of like news whiplash. What’s next and who’s going to come after us next? We thought we were nice Canadians just providing high quality seafood to the world, but everybody wants to put tariffs on us.”
Irvine says maybe it’s because lobster is so popular it’s easy to use in economic wars.
“We’ve been through lots of challenges in the past and we will weather this one.”
