The Maine lobster industry is about to get a $50 million federal bailout to offset the crippling impact of the U.S.-China trade war.
The U.S. Department of Agriculture announced the creation of a $527 million seafood trade relief program on Wednesday that will pay licensed fishermen a certain species-specific amount for every pound of fish landed in 2019 to absorb sales declines and increased marketing costs caused by China’s retaliatory tariffs. The maximum individual payout is capped at $250,000.
The rate of payout per species varies, depending on how much regulators believe the market was hurt by the Chinese tariffs, ranging from as little as a penny a pound for pollock to as much as 76 cents per pound for geoduck, a large saltwater clam harvested in the U.S. Northwest that had been very popular in the Chinese market.
In Maine, where lobster is king, fishermen can net 50 cents for every pound of Maine’s signature crustacean brought to market last year, the second-highest payout rate of any species. Maine landed nearly 101 million pounds of lobster in 2019, valued at $485.4 million. If every pound qualified, Maine lobstermen could land more than $50 million in seafood trade relief.
“Many nations have not played by the rules for a long time, and President Trump is the first President to stand up to them and send a clear message that the United States will no longer tolerate unfair trade practices,” said U.S. Agriculture Secretary Sonny Perdue in a prepared statement Wednesday.
“The Seafood Trade Relief Program ensures fishermen and other U.S. producers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe,” added Perdue, who was tasked with finding a way to help lobstermen after Trump’s visit to Maine in June.
The rest of Maine’s seafood supply chain, most significantly lobster dealers and processors, are not eligible for any bailout under this new program, even though that was the part of Maine’s industry that seemed to suffer the biggest impact. Lobstermen earned a whopping $4.82 per pound in 2019, the highest since Maine began tracking lobster hauls in 1880.
In June, during a meeting with fishermen in Bangor, President Trump highlighted the high-profile role that U.S. lobster is playing in the U.S.-China trade war, and he promised that his administration would take steps to ensure China was honoring its commitment to buy more U.S. seafood, especially Maine lobster.
He directed Perdue to include lobster in any future federal bailouts intended for farmers hurt by the trade war, and he ordered U.S. Trade Representative Robert Lighthizer to start giving him monthly reports on China’s efforts, and its progress, in meeting its phase-one promises to buy more U.S. lobster.
Before the tariff, China was the biggest overseas buyer of U.S. lobster, with its growing middle class consuming $128.5 million of the lucky-red status symbol in 2017. The U.S. was on pace to triple its exports to China before lobster was added to that nation’s tariff hit list in July 2018.
The retaliatory tariffs of 25 and then 30 percent that China levied on U.S. lobster imports sent Chinese buyers to Canada, which sells the same species of lobster without the same price-busting tariffs. As a result, the lobster trade from the U.S. to China collapsed, from $86.9 million in the first six months of 2018 to $26.1 million in the same stretch of 2020.
The impact of the pandemic on global seafood markets is partly to blame. International sales of U.S. lobster are down 47 percent through June, from $114.3 million in 2019 to $60.6 million in 2020. But no other country is obligated to buy U.S. lobster like China. In January, as part of a mini trade deal, China vowed to buy $36 billion in U.S. agricultural goods over the next two years.
Lobster was the only seafood that specifically made it onto China’s mandatory agricultural shopping list.
China can’t make its huge, fast-growing middle class rekindle its love affair with U.S. lobster. Instead, it has offered a retaliatory tariff exemption to those importers who want to buy U.S. lobster again, making it no more costly to bring into the country than Canadian lobster. But the trade data show the exemption isn’t working, at least not yet.
That is where the Seafood Trade Relief Program comes into play. Licensed commercial fishermen can apply through their local Farm Service Agency service center starting on Sept. 14. They don’t have to prove a personal loss, but must have proof of their 2019 landings of an impacted species, proof of adjusted gross income, tax ID number and direct deposit information.
The deadline for applications is Dec. 14.
This story will be updated.
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Feds to pay Maine lobstermen $50 million to offset trade war losses - Press Herald
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