Lobster will be exempt from tariffs imposed on Canada by President Donald Trump, but industry officials are concerned that Maine’s signature seafood still will take a hit as consumers react to steep increases in prices for other household goods.
Lobster, which generated more than a half billion dollars in direct income for Maine fishermen last year, is exempt from North American tariffs announced Wednesday by Trump because of the U.S.-Mexico-Canada Agreement. That agreement, often referred to as USMCA, replaced the former North American Free Trade Agreement, or NAFTA, in 2020 during Trump’s first term in office.
Under USMCA, products that are wholly grown or made with items from Canada or Mexico are not subject to import taxes when entering the United States. This exemption will apply to lobster, which often is caught in Maine and processed in maritime Canada before being returned to the U.S. for the domestic market.
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But officials in Maine’s lobster industry said Thursday that there is still reason for concern that it will suffer from the new economic reality that the tariffs will bring to U.S. consumers.
Lobster is considered by most people a luxury product, because of its relatively limited supply, and the uncertainty caused by the tariffs likely will cause North American consumer demand for the tasty crustacean to drop, according to industry experts who participated in an online seminar on tariffs hosted Thursday by the Island Institute.
If people see the price of shoes and clothing from southeast Asia increase by more than 30 or 40 percent, reflecting the steep tariffs imposed by Trump on those countries, they may well choose to eat out less or buy less expensive groceries, they said.
Luke Holden, the founder and CEO of Luke’s Lobster, said that consumers’ spending power will diminish as they focus more on essentials and reduce discretionary spending on things that may or may not be directly affected by tariffs. Holden’s company operates more than 30 restaurants in the U.S. and Asia and sells packaged lobster products in grocery stores.
Even before the tariffs were unannounced, Trump’s repeated threats and whiplash decisions over import taxes had made U.S. consumers more cautious in their buying habits, he said.
“I think a lot of this uncertainty is driving a lack of consumer confidence,” Holden said of the tariff’s indirect impact on the industry. “It doesn’t make for a ripe environment to just pass costs on [to the consumer].”
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Amanda Rector, Maine’s state economist, said that even if rhetoric over the tariffs has resulted in a “more troubled” relationship between Canada and the U.S. over the past two months, provincial officials in New Brunswick and Nova Scotia know that Mainers are not driving those divisions. Relationships across the border between local businesses and officials remain relatively strong, she said, and likely will stay that way.
Even so, cross-border relationships are not a tonic for ongoing uncertainty over how the tariffs will play out in the coming months, she said.
Eric Miller of Rideau Potomac Strategy Group, an international trade consulting firm, said that tariffs have long been one of Trump’s policy objectives and that the new ones imposed by his administration likely will be in place “for a long time to come.”
And it is not just a matter of trade with Canada, he added.
The growth in exports of Maine lobster to Asia over the past 30 years surely will suffer as China and other countries impose retaliatory tariffs on goods they import from the United States, Miller said. And it won’t be easy to simply find new buyers in North America to replace that drop in demand from overseas, he added.
“A lot of that volume that went to the Asian export market will have to find new homes,” he said.
