The Trump administration says it will step in to aid the U.S. lobster industry, which is being battered by retaliatory tariffs by China and losing ground in Europe to Canadian competitors receiving favorable treatment under a trade agreement.
Maine lawmakers, including Republican Sen. Susan Collins, who faces a tough reelection race this year, welcomed the White House support. Maine accounts for most of the lobster production in the U.S., and the state's four-member congressional delegation has been calling for the administration to provide a financial lifeline or a trade agreement with Europe since 2019.
In a joint statement, Collins, independent Sen. Angus King and Democratic Rep. Chellie Pingree said they will keep an eye on the administration’s efforts to help the industry.
“We have always been strong, steadfast advocates for resolving the trade barriers harming the lobster industry, which supports the livelihoods of thousands of Mainers, and have repeatedly pushed for actions to alleviate the economic challenges those employed in our seafood supply chain are experiencing,” the three Maine lawmakers said.
President Donald Trump issued a memorandum Wednesday night directing the Agriculture Department to within 60 days consider how it can provide financial aid or other trade assistance to the lobster industry and the broader seafood industry. Alaska and Louisiana are top seafood producers. He did not offer details but alluded to a multibillion-dollar trade aid package Agriculture Secretary Sonny Perdue paid out in 2018 and 2019 to farmers and ranchers hit by retaliatory duties by China, the European Union and other trading partners.
Starting Aug. 15, the office of the U.S. Trade Representative is directed to provide monthly reports on whether China is meeting general purchase obligations under the phase one U.S.-China trade deal for several categories of U.S. products and services and how much lobster from Maine and other states it is buying.
If China does not seem to be buying enough U.S. seafood, the memorandum says Trade Representative Robert Lighthizer “shall consider, to the extent permitted by law, taking all appropriate action to impose reciprocal retaliatory tariffs on seafood exports from China.”
U.S. tariffs on imported Chinese goods triggered retaliation from Beijing directed largely at U.S. agricultural and food products. On July 6, 2018, China imposed an additional 25 percent duty on U.S. lobster and increased the duty to 35 percent on Sept. 1, 2019. When the phase one trade deal took effect Feb. 14, China lowered the retaliatory rate to 30 percent.
The White House memorandum noted that U.S. lobsters face total tariffs of 35 percent to 37 percent when duties that existed before retaliation are included.
As part of the memorandum, the administration will ask the U.S. International Trade Commission to review the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and to report on any harm CETA has on the lobster industry.
Under the agreement, many of Canada’s products such as lobster enter Europe at lower tariffs or duty free.
Once the White House receives the report, the memorandum says the Trade Representative’s Office will consult with the Commerce and Agriculture departments about how to mitigate CETA’s effects.
But Marc L. Busch, who has written and spoken about the lobster industry’s trade woes, said the administration is missing the real solution to the challenges the industry faces with Canada and Europe.
“There’s no mystery here. Sign TTIP,” said Busch, a nonresident scholar at the Atlantic Council and a professor of international business diplomacy at Georgetown University. He said if the administration wants to aid U.S. industries and workers, it needs a trade agreement with the European Union, a major trading bloc of 27 nations.
The Obama administration and Europe conducted multiyear negotiations on the Transatlantic Trade and Investment Partnership (TTIP), but could not iron out several thorny issues.
As for China, Busch said the lobster memorandum could be the first of several expressing the administration’s dissatisfaction with Beijing’s level of purchases.
“I imagine you could see a flurry of these once there is a review that shows China’s purchases have not met the purchase levels,” Busch said.