Insiders say the lobster trade is a great example of long-standing co-operation on both sides of the border
New Brunswick’s fabled lobster trade – worth $1.3 billion annually – would be severely pinched by Donald Trump’s tariffs, say industry insiders.
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Fishermen would be forced to swallow a depressed price for their catch and processors would have a lot less work, shaking up a commercial enterprise that employs about 5,000 New Brunswickers on boats and another 5,000 in seafood plants.
Behind the scenes, the lobster lobby is working feverishly to convince officials in the White House administration and other top Republican officials that imposing a 25 per cent tariff on seafood would be a big mistake for American consumers already reeling from the higher cost of living.
These tariffs would definitely be a blow.
Greg Thompson
Most seafood eaten by Americans – close to 80 per cent – including lobster, is imported, so the tariffs the U.S. president has delayed but threatened to impose March 4 could hike prices for consumers in his country, although by how much is anyone’s guess.
The lobster market has long been deeply integrated between Canada and the United States and would be badly wounded by a trade war between the two nations.
Greg Thompson, the former president of the Fundy North Fishermen’s Association and an adviser to its board of directors, likened his industry to others across Canada, such as the auto industry that sees a finished product on one side, but all hands on deck on both.
He is dismayed by Trump’s threat against Canada.
“I don’t think it’s helpful at all,” said the fisherman from Dipper Harbour on the Bay of Fundy, who retired after working on boats for 49 years.
“The lobster industry isn’t exactly like the auto industry, it’s much smaller scale, but it’s a good example of integration. The product goes back and forth across the border, processed on one side and the product goes back. It’s very, very intertwined. So, these tariffs would definitely be a blow.”
The variety of lobsters caught in this region – called Homarus americanus, or the American lobster – come from New England, Nova Scotia, Prince Edward Island, New Brunswick, Newfoundland and Labrador and Quebec.
A large portion of the catch – about half – is destined to be sold as whole or market lobsters, especially popular in the growing markets of China, South Korea and Japan. These are bigger lobsters that weigh more than three-quarters of a pound, typically one to two pounds, the kind you’d see crawling around in a tank at a grocery store with rubber bands around its claws.
But the smaller ones – called canners because they used to be packed in tin – are often destined to be cut up and processed as frozen lobster.
New Brunswick is the kingpin when it comes to frozen lobster, with about half the world’s supply comes from about a dozen processing plants in the province.
The raw material that feeds these plants comes from fishermen all over the region, including Maine.
Once the lobster is cut and packaged – including the crustaceans that originated from America – about three-quarters is shipped for sale to the United States, much of it in large format, with the succulent tails a favourite for big chain restaurants, casinos and cruise ships.
The Canadian industry has worked hard over the years to expand markets worldwide, with great success selling more lobster to Asia and Europe.
But the American market remains the granddaddy of them all, thanks to the sheer size of the population – 350 million people – and how close it is to Eastern Canada, making shipping a breeze.
Geoff Irvine, the executive director of the Lobster Council of Canada, was on a trade mission last week to Europe with officials from 14 Atlantic Canadian seafood organizations. It’s part of an annual excursion that was planned well before Trump’s re-election last November.
It’s very disruptive, absolutely disruptive to business in the world to use tariffs as an economic weapon as he is. And he knows it. Everybody knows it.
Geoff Irvine
Irvine groaned when asked about the tariffs.
He said he doubted American consumers would swallow paying 25 per cent more for what is already considered a premium product.
During times of strife and economic pain, consumers usually stick to necessities and forgo luxuries.
“If we want to sell the lobsters and move product in the spring, we’ll have to adjust to the new market,” he said from Rome, part of a trip that included France and England.
“But with the indecision on tariffs and crazy dynamic, it’s hard to predict. If the tariffs are imposed, it will be very disruptive and it’s going to mean we’ll have to keep doing what we’re doing now, which is to work harder to find markets outside of the U.S. for our products.”
New markets take time to develop, and Irvine doubted Canadian processors would quickly find enough lobster lovers from other countries to replace American consumers.
Ultimately, prices for lobsters would have to drop because importers who swallow the tariffs wouldn’t want to pay such a high cost, knowing they couldn’t sell it for that much.
This would in turn make it harder for fishermen on both sides of the border to make a living.
The Trudeau government has promised countermeasures against the U.S. tariffs, including slapping on tit-for-tat tariffs on $155 billion in American goods. However, the list of products does not include lobster. The Canadian industry successfully convinced Ottawa that taxing the creatures twice – once when they cross the border for processing, and again on the way back – would be too devastating.
Irvine just wishes Trump would listen to reason.
“It’s very disruptive, absolutely disruptive to business in the world to use tariffs as an economic weapon as he is. And he knows it. Everybody knows it. It’s very frustrating and it’s very painful to try to predict what the impact will be because this seems to change every day.”
There is one possible flipside to a trade war that includes the clawed creatures. Irvine pointed out that Canada isn’t the only country in the president’s crosshairs. And going after the rest of the world could play in Canada’s favour, at least when it comes to market lobsters.
“If Trump goes after the European Union, and the E.U. counters by tariffing American lobster, we could potentially do better in Europe. Likewise, with China. He’s just put in a 10 per cent tariff on Chinese goods. We don’t have that problem with China, so possibly we can get more business in China.”
Two dozen plants in the Maritimes process lobster, with the bulk in New Brunswick.
Nat Richard of Moncton represents them as the executive director of the Lobster Processors Association.
“Frozen lobster is our sweet spot, that’s what we specialize in,” he said. “And our biggest customer is the United States. As you can imagine, 75 per cent is a big number, and you cannot easily go elsewhere. People say ‘go to China,’ but you have to remember, China is overwhelmingly a live market. I’m not saying it’s not a big market for us, but 90 per cent of what goes there is live.”
Richard said those cultural preferences make a difference. In Europe, for instance, consumers like to eat in-shell, precooked red lobster.
“So not so much just the meat, but bulk packs of whole cooked lobster, netted in large format. We don’t sell a ton of frozen lobster meat in Europe and Asia.”
Nova Scotia specializes in the large market lobsters, as does New Brunswick’s side of the Bay of Fundy. Those lobsters, as Thompson describes them, are caught when they are hard-shelled and hardy. They can more easily survive the long journey from a place like Dipper Harbour to, say, Shenzhen.
The Nova Scotia lobster industry air ships much of the crustaceans alive, as do lobster middlemen in the United States. Many of those market lobsters are caught in Canadian waters and then are shipped to China from the U.S., another example of integration.
Meanwhile, many of the region’s canners, with their soft shells, are shipped to the processing plants.
Richard says that last year, fishermen in Maine, New Hampshire and Massachusetts landed 110 million pounds of lobster. On the Canadian side the take was double, 220 million pounds.
A sizeable amount from the American side flows to the processing plants in Canada – about 34 million pounds in 2024, close to 40 per cent of Maine’s total catch.
The processors love that American harvest because most of it comes through in the later portion of the year, particularly in July and early August when no Canadian lobster fisheries are open.
The Canadian seasons are short, often only six weeks, and predominately in spring and winter.
The Americans can fish mostly when they want and take advantage of the periods when Canadian traps are not in the water.
It makes for a steady flow of crustaceans to the plants, keeping the industry busier throughout the year and providing steadier employment to plant workers.
“If you look at the landings over the year, it’s quite complementary,” Richard said. “It allows us to keep or plants humming when we don’t have fishing in Canada. So having the high tariff scenario tremendously undermines that two-way trading relationship.”
Richard warned that developing new markets for frozen lobster wouldn’t be easy because of cultural habits.
“Listen, if we can get them into the lobster roll craze in Europe and in China and other markets, I’m all for it. But the dominance of the U.S. is such that the notion we’ll just turn to other markets on a dime is not realistic.”
He said trade relations take years to develop and to expect a sudden change overnight isn’t in the cards. Lobster processing is a high-volume, low-profit margin business, he says, and the industry needs a big, easy market to go to.
“I’m not saying we shouldn’t develop other markets. I’m absolutely convinced there will be added urgency to lessen our dependence on the U.S. market, but we do a lot of business there for obvious reasons. Geography matters – it’s close – and the logistics are a lot less complicated. It’s an attractive market.”
However, few in the industry believe Americans will tolerate paying a premium for their lobster if tariffs are imposed.
“We’re talking about luxury proteins. It’s not a daily staple of the average American diet. It’s a luxury food. It’s not a commodity like softwood lumber or petroleum that they need to get by. We’d get pushback from the market, saying we won’t buy it if it’s too expensive.”
Richard, who worked for Westmorland Fisheries and Cap Bald Packers in Cap-Pelé earlier in his career, recently attended an annual industry get-together in Bar Harbour, Maine.
He left there optimistic after previously only hearing all the doom and gloom of Trump’s tariffs.
It’s critical for U.S. voices to be heard. If they say, ‘maybe this isn’t a good idea’, maybe he’ll have second thoughts.
Nat Richard
He said the Americans he talked to understand the importance of the integrated market. And the executive was encouraged to hear Republican Senator Susan Collins, Democratic Congresswoman Chellie Pingree and Democratic Governor Janet Mills, all of Maine, deliver full-throated defences of the two-way lobster trade.
“Maybe we can head this off completely,” Richard said. “They understand as well that this will not be good. Any time you have sudden, disruptive changes to trade patterns, it’s not good. They get it.”
He also pointed out that Trump was elected in no small part because American voters were frustrated that the Biden administration couldn’t keep the cost of living from exploding.
“It’s critical for U.S. voices to be heard. If they say, ‘maybe this isn’t a good idea’, maybe he’ll have second thoughts.”
The industry is also renewing a push for fewer trade barriers within Canada. Although it’s easy for Canadians to buy lobster – you can find it in Alberta at a reasonable cost, more than 3,500 kilometres from the East Coast – the procurement of lobsters is another matter.
Richard said Quebec and Newfoundland are the worst offenders, having sought exemptions in the Canadian Free Trade Agreement. They make it awfully difficult for processors in New Brunswick to buy lobsters directly from their harvesters.
To support the flourishing of its own processing industry, the provincial government of Quebec in recent years would only issue new licences to homegrown processors if they agreed to buy their lobsters from out-of-province, from places like New Brunswick. It was a double whammy against trade.
“It’s a point of frustration. We’re sort of hopeful that with all these discussions happening and with the momentum to eliminate interprovincial trade barriers, that with the case of seafood, we can push through changes. We’ve been talking about it a long time and it might be timely to deal with these issues once and for all.”
Still, even if the trade is improved in Canada, it will not replace the American market. You simply cannot compare the stomachs of 40 million Canadians to that of 350 million Americans.
“We Canadians could eat lobster for breakfast, lunch and supper, and it still wouldn’t be enough to eat all our lobsters,” said Richard, laughing.