The trade war between the United States of America and China is changing trade patterns for lobster. With the US lobster subject to a 25 percent tariff in China, Canada is taking over US market shares. At the same time there are rumours of US exporters dumping lobster on other Asian markets. Demand and prices are expected to go up.

International trade

US imports of lobster have been rather stable over the last few years. During the first half of 2018, imports amounted to 29 800 tonnes, 3.4 percent higher than during the same period in 2017. US exports of lobster increased by 18.2 percent to 11 700 tonnes. During the first half of 2018, China was by far the largest market for US lobsters, accounting for almost half of total US exports. Canada was still the largest supplier of lobster to China during this period, and will surely increase its market share during the second half of the year. In total, Canada exported 42 000 tonnes of lobster during the first half of 2018, of which 6 000 tonnes went to China and as much as 27 200 tonnes (65 percent) went to the United States of America.

The on-going trade war between China and the United States of America is causing some traders to use illegal means to get US lobsters into China. According to reports from China, there are plenty of small-sized soft shell US live lobsters on the Chinese market, often labelled as Canadian lobster, sometimes shipped through Vietnam in order to avoid the 25 percent import tariff on US lobsters in China.

The Lobster Council of Canada is concerned about this practice because it could damage the Canadian lobster brand. The rules of origin are quite clear though: if a lobster is caught in US waters it is of US origin, even if it is shipped out of a Canadian airport.

A Chinese seafood conglomerate claims that US lobsters are being dumped on Asian markets at low prices because of the 25 percent tariff imposed on US lobsters in China. They claim that US lobsters, known as Boston lobster, is being sold at USD 1.00 lower than Canadian lobsters in Hong Kong, Taiwan Province of China and Malaysia. However, US lobster exporters deny that this is happening, although they admit that the trade war is having a negative effect on the US lobster market. US lobster exporters are looking for alternative markets, while Canadian lobster exports to China have increased sharply since the 25 percent tariff was introduced in July. 

Prices

Despite the trade changes, the current trade war does not seem to have any major effect on US lobster prices. Prices for Maine lobster have dropped marginally by USD 0.25–0.50 per lb since 6 July, the day the 25 percent tariff went into effect. Lobster landings normally peak in the period from July to October, with August being the main production month. Prices on the US domestic market are quite seasonal, but there was a marked drop in June 2018. On the European market, there was a similar drop, although not as pronounced as in the United States of America. The long-term price trends are pointing moderately upwards.

Outlook

It is obvious that the trade war between the United States of America and China will continue to have a major impact on the global lobster market. Canada will take over a larger market share of the Chinese market, and the United States of America will have to direct its exports to other countries. There is also the risk of price cuts as US exporters try to find alternative markets for their lobster. In the longer run it is expected that the global lobster market will grow and, with the supply situation being relatively stable, this will translate into higher prices, especially for live lobster.

A report released in October by Ireland-based market research company Research and Markets predicted that the global lobster market will increase by 5.6 percent annually until 2022. Lobster is increasing in popularity and the report also points out that some product development is expected in the period until 2022.