July 6, 2018 — First Irma, now a trade war.
Less than a year after Hurricane Irma tore through the Florida Keys, lobster fishermen are facing another hit from the trade war with China.
Tariffs set to take effect Friday threaten to bump up prices by 25 percent — an increase that could cool demand in the lucrative Chinese market, say experts.
“This is a major impact on our fishery,” said Jeff Cramer, who fishes out of Conch Key. “And just a year after we got wiped out by the worst hurricane we’ve had in recent memory.”
Before the Chinese market picked up a decade ago, the going rate for a pound of lobster was $3. Today, fishermen can get between $10 to $20 per pound from Chinese buyers, and commercial fishermen like Cramer now send up to 75 percent of their Florida spiny lobsters to China.
“The Chinese market saved the fisherman’s ass,” said Cramer.
But with the boom came a dependence: Cramer’s Chinese buyers say that retailers have no appetite for absorbing the cost of the tariff, meaning he likely will need to lower his prices or risk losing his biggest buyers when the lobster commercial fishing season opens Aug. 6.
When possible, businesses incorporate tariff costs into consumer prices. For example, steel, lumber and aluminum tariffs imposed by the Trump administration in the past year have pushed up building costs, affecting home prices as well. But margins in the lobster trade are already slim, and Cramer worries that competition from Australia and Brazil will toss Florida out of the market if prices go up.