China tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertaintyChina tariffs on Canadian seafood add to trade uncertainty

China’s New Tariffs on Canadian Seafood: A Growing Crisis for Atlantic Canada

China’s recent announcement to impose 25% tariffs on Canadian seafood products has sent shockwaves through an industry already grappling with uncertainty. This decision comes in retaliation for Canada’s 100% surtax on Chinese-made electric vehicles and 25% tariffs on steel and aluminum. The new tariffs, set to take effect on March 20, target key Canadian exports such as lobster, snow crab, shrimp, and niche products like sea cucumber, whelk, and prawns. For Atlantic Canada, where fishing and seafood processing are cornerstone industries, this move adds another layer of complexity to an already precarious trade landscape.

Kris Vascotto, executive director of the Nova Scotia Seafood Alliance, describes China’s tariffs as a “very strategic hit” on the region’s fish and seafood sector. The organization represents 135 shore-based processors and shippers, many of whom are bracing for the impact of price volatility that could ripple through the entire supply chain, from processors to harvesters. Vascotto warns of a “fairly volatile season” ahead, as companies will need to absorb the added costs of tariffs to keep their products competitive in international markets.

The Impact on Lobster and Other Key Exports

Lobster, a flagship product for Atlantic Canada, is particularly vulnerable to these tariffs. In 2023, Canada exported $569 million worth of lobster to China, accounting for a significant portion of the $1.3 billion in total seafood exports to the country that year. While the U.S. remains Canada’s largest market for frozen lobster, China’s importance cannot be overstated, especially for live lobster exports. Nat Richard, executive director of the Lobster Processors Association, notes that while the U.S. tariffs on seafood have been paused until April 2, the Chinese tariffs will hit specific sectors harder, particularly those reliant on live lobster shipments.

Richard explains that the effects will vary between processing plants, as some rely heavily on the Chinese market while others have diversified their exports. For instance, Maine’s lobster catch, which accounts for 85% of U.S. production, is largely processed in Canadian plants. This integrated supply chain underscores the interconnected nature of the industry and the potential fallout from trade disputes. Meanwhile, Stewart Lamont, managing director of Tangier Lobster Company Ltd., highlights that China’s tariffs are compounding an already challenging situation, as the existing 7% tariff and 9% value-added tax on Canadian lobster in China have driven up costs.

Diversification: A Lifeline for Some, a Challenge for Others

While some companies, like Tangier Lobster Company, have managed to diversify their markets to mitigate risks, others remain heavily reliant on Chinese trade. Lamont’s company, which exports live lobster to 13 countries and avoids the U.S. market entirely, has successfully reduced its dependence on China. However, he acknowledges that diversification is no easy feat. “All of those things take time, money, marketing, and creativity,” he says, emphasizing that building new markets is not a short-term solution.

For companies that have invested heavily in the Chinese market, the tariffs present a significant challenge. Finding new buyers and adapting to changing market demands requires resources and time that many smaller businesses may not have. This disparity underscores the uneven impact of the tariffs, with larger, more diversified companies better equipped to weather the storm than smaller, specialized operations.

The Broader Trade Picture: A Perfect Storm of Uncertainty

The seafood industry is not the only sector caught in the crossfire of trade tensions. China has also announced additional tariffs on Canadian rapeseed oil, oil cakes, peas, pork, and aquatic products, further straining bilateral relations. Meanwhile, the U.S. tariffs on Canadian imports, initially imposed by the Donald Trump administration, have created a climate of uncertainty. While the U.S. has delayed some tariffs until April 2, the ongoing unpredictability has left businesses scrambling to adapt.

The Lobster Processors Association’s Nat Richard points out that the U.S. tariffs pose a higher risk due to the highly integrated nature of the North American supply chain. Canada’s role in processing lobster caught in Maine highlights the interconnectedness of the industry and the potential for widespread disruption. As trade tensions escalate, the affected industries are calling for clarity and stability to navigate the shifting landscape.

Navigating the Storm: Resilience and Adaptation

Despite the challenges, many industry leaders remain optimistic about the resilience of Atlantic Canada’s seafood sector. Companies like Tangier Lobster Company have demonstrated that diversification and strategic planning can help mitigate risks. However, smaller businesses and those with limited resources face an uphill battle.

The federal government has yet to announce specific measures to support the industry, but stakeholders are urging action to help companies absorb the added costs and explore new markets. In the meantime, the focus remains on maintaining the quality and reputation of Canadian seafood, which has long been a cornerstone of global trade. As Vascotto notes, the ability to adapt and innovate will be key to navigating this volatile period.

Looking Ahead: Uncertainty and Opportunity

The imposition of Chinese tariffs on Canadian seafood marks another chapter in an increasingly complex trade environment. For Atlantic Canada, the stakes are high, as the industry faces not only external tariffs but also shifting market dynamics and supply chain disruptions. While the immediate future appears uncertain, there is also an opportunity for innovation and growth.

As the industry adapts to these challenges, diversification, collaboration, and government support will be critical. Companies that can pivot quickly and explore new opportunities may emerge stronger, while others will need to rely on their resilience and resourcefulness. In the end, the seafood sector’s ability to weather this storm will depend on its capacity to evolve and thrive in a rapidly changing global market.