The Impacts of Trump’s Trade War on the Maine Lobster Industry and the Implications for Marine Conservation

Source: Science Appliance/John Bohórquez

Photo: Grant Elliot/Unsplash

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As I drove down a foggy road, winding along the rugged coast of Downeast Maine, I couldn’t help but notice something was missing.  Between the old churches, farm stands, summer houses, and homes of local lobstermen, with traps and buoys piled high on their lawns, there was a noticeable absence of a familiar blue yard sign with the name of a then presidential candidate.

Hillary Clinton won 3 out of 4 of Maine’s delegates in the 2016 election. But a lot of the more rural counties in the state, including along the coast, voted in favor of Donald Trump or were at least closely split.  Many lobstermen and folks in related businesses were not shy to voice their support for the now President, so I was surprised to not see a single “Trump” sign upon my return to Maine this summer, where I had seen them so frequently last year and the year before.  Might something have happened that would withdraw support?  Perhaps I’m just imagining things, or maybe all the Trump paraphernalia blew away in a winter gale.  But in a state where lobsters are the heart of the nation’s most valuable fishery, totaling nearly $500 million in catch value per year, plus another $1 Billion in added value from businesses tied to the industry to make up 2% of Maine’s economy, it’s hard to imagine any ‘Mainer’ that wouldn’t be worried as the following news headlines rolled out over the course of the summer and into the fall:

“Trump Boils Maine Lobstermen” – The Wall Street Journal, June 29th

“Maine’s lobster industry fears US-China trade war will hurt business” – Fox News, July 24th

“Trump’s Trade War, Tariffs, Hit New England Lobsters” – Newsweek, August 10th

“Layoffs Hit, Prices Lag as China’s Tariff Pinches American Lobster Industry” – WBUR News, September 16th

“Tariffs on exports to China continue to hobble Maine lobster dealers” – Portland Press Herald, October 12th

Many of these and other news articles tell the whole story in detail, some quoting conservative lobstermen and other stakeholders all at least questioning President Trump’s methods.  To briefly recap, China had recently arisen as a major export market for US lobsters, valuing at $142 million dollars or 20% of total US lobster exports, 83% of which come from Maine.  But as part of the ongoing U.S. – China trade war, the Trump administration’s tariffs on steel has made lobster traps more expensive to produce in the United States. Meanwhile, China has more than doubled tariffs on lobsters imported from the United States.  To add insult to injury, China simultaneously cut tariffs on Canadian lobsters in half.  The resulting price difference has all but cut off exports of Maine lobsters to China entirely, the Chinese buyers preferring to import the cheaper Canadian stock.  In August, Maine and Massachusetts reported a more than 80% decline in sales to the country. One way to combat the loss of sales could be to lower wholesale prices, which some have done.  But lobstermen and associated dealers already run on notoriously thin profit margins, so even a small dip in prices or increase in expenses (i.e. more expensive traps) could have significant consequences to the industry as a whole.

As of now, the dealers and wholesalers are the businesses that have taken the brunt of the impact, many reporting layoffs as the summer tourist season waned.  The lobstermen themselves frequently report that they have yet to feel the impacts directly.  Though many remain concerned by what may come over the coming winter months, when exports traditionally make up a far greater share of demand, which will surely test the resilience of the industry to the tariffs.   So it will be interesting to see where the Maine lobster industry stands six months from now, and lobstermen may well be facing the impacts of the tariffs by then.  But for dealers in particular, some are already predicting that they won’t make it to spring at all.

There are a lot of interesting economic and political questions surrounding the impact of the U.S. – China trade war on the Maine lobster fishery. As someone with particular focus on the economics of marine conservation, I think it’s worth opening the discussion on the potential implications the trade war may have on marine conservation both in the United States and abroad via its impacts on the Maine lobster fishery. Should the economic consequences continue, if not significantly amplify as a result of the trade war, it is feasible that layoffs will continue and some businesses may be driven out of business, or at least take a temporary reprieve from the practice.  This is clear already for lobster dealers and wholesalers, and could be further experienced by lobstermen themselves as the situation progresses, possibly resulting in reduced fishing effort if the impacts are severe enough.  Most marine conservation experts agree that fishing remains the greatest threat to marine biodiversity overall, so it is easy to argue that any such outcome that results in reduced fishing effort could be good for marine conservation overall.  However, when thinking deeper, I would argue that such an outcome may actually be detrimental to marine conservation, here’s why:

  1. Marine conservation goals include socio-economic wellbeing of coastal communities: The goals and objectives of marine conservation efforts are increasingly including socioeconomic indicators as measures of success.  Like other industries in many rural parts of the country, few lobstermen in coastal Maine (especially in more rural sections) have viable employment opportunities and an economic decline in the fishery due to tariffs (or any other reasons) could devastate entire communities and the tens of thousands of people it employs.  Such an outcome would be considered a failure through a modern conservation perspective.
  2. It could lead to more pressure to exploit degraded or recovering Maine fisheries: Commercial fishing in Maine could be described as a “monoculture” in that it is dominated by a single species, lobsters.  This is both because other fisheries in the state, particularly ground fisheries like cod, have declined and thus far failed to recover while lobsters have proliferated in the last 10-20 years.  Frequently, when one fishery is closed or otherwise becomes unviable, fishermen may try to substitute effort towards another species or fishery.  In the context of our first point on employment, a decline in the lobster industry combined with the lack of alternative employment opportunities may increase societal and political pressure to further exploit other fisheries in Maine, many of which are in no place to withstand added fishing effort.
  3. The Maine lobster fishery is a conservation minded fishery: A recent study published in a top journal has estimated that half of a 500% growth in lobster abundance in the Gulf of Maine can be attributed to conservation minded principles that the industry self-imposed generations ago. Many regulations that are part of this “conservation ethic”, such as prohibiting harvest of breeding females and large productive individuals, are more than half a century old and were implemented on a community level that continues to help govern the fishery today under a co-management system.  Such careful consideration of breeding females and large fecund individuals in addition to communal participation, management, and ownership are many of the features that marine conservation initiatives around the world strive to achieve today.  Therefore, the Maine lobster industry and the “conservation ethic” it is famous for could serve as a model or inspiration to implement or improve management efforts in other parts of the world.  But if the success of this conservation minded fishery is diminished due to macro-economic and political factors, then it undermines the ability to communicate the advantages of such practices elsewhere.
  4. It could block efforts to reduce whale entanglements and improve the sustainability of the lobster fishery: Seafood Watch, a seafood sustainability rating program, rates lobsters from the Gulf of Maine and Canada as a “Good Alternative”.  Despite being well managed, the one condition for which the program does not give it a top rating of “Best Choice” is because of gear entanglements with critically endangered North Atlantic right whales.  The Maine lobster fishery currently has plans to amend this issue via gear changes.  However, lobstermen are already concerned about the expenses required to complete said gear changes.  Any reduction in profitability of the lobster fishery as a result of the U.S. – China trade war, either via cost of new gear or decrease in sale prices, could potentially undermine such conservation efforts on the part of the fishery by making such adaptations even more economically unpalatable than they already are.

Originally posted to Science Appliance

Photo: Grant Elliot/Unsplash

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