A series of retaliatory tariffs between Beijing and Washington has led to global trade changes, incubating many new winners and losers in the sale of commodities such as soybean, pork and seafood.
In July of this year, China began to impose a 25% tariff on seafood from the United States, including lobsters that are favored by China’s rapidly growing middle class. As Chinese demand for lobsters from Canadian has soared, some airports in Canada are increasing cargo flights to accommodate higher exports.
At Halifax Stanfield International Airport in Canada, Glenn Boone, the director of airport’s cargo transportation, said that the cargo volume of the airport increased by 42% and 55% in July and August, compared with the same period last year, driven by the demand for seafood products in China.
The data from Statistics Canada shows that the fresh lobster exported to China in July this year almost doubled to 1.25 million kilograms, the highest level in at least six years. In 2017, Canada exported C$174.6 million ($130.6 million) worth of live lobster or fresh lobster to China.
Stewart Lamont, a lobster exporter in Nova Scotia, said that his company’s exports to China have increased by 30% since July this year on an annual basis. “The tariff factor has really redirected business to Canada,” he said.
For U.S. seafood importers, tariffs bring price increases and greater difficulty in purchasing. They were scrambling to hoard Chinese seafood such as frozen squid and tilapia before the tariffs were imposed.
According to the latest data from IHS Markit, frozen tilapia imported from China by U.S. importers in June and July of 2018 increased by 6% (in dollar value) over the same period in 2017. The frozen squid, another major commodity imported from China, has risen by 20% in dollar value.
Peter Huh, CEO of Pacific American Fish Company Inc, said that in recent months the company has imported about 20% more scallops and calamari from China to stock up. In order to bypass the tariffs next year, they may further increase their inventories.
“That’s the only option we have,” said Huh.
The U.S.-China tariffs dispute has also led to some unexpected situations. For example, industry organizations, wholesalers and exporters in the US and Canada have indicated that Canada is increasing demand for lobsters from Maine of U.S.
As Chinese buyers turned their sights to Canada, Maine’s lobster wholesaler distributor, Stephanie Nadeau, said her company’s September sales dropped 40%. But she said that the price of lobster was still stable in Maine, because of the demand for northwest of the border. “The Canadians have stepped in.”