BOSTON — Sales of Massachusetts lobster to China have plummeted 62% over the last year amid a growing trade war with one of the state’s largest trading partners, a state trade official testified Tuesday.
Mark Sullivan, executive director of the Massachusetts Office of International Trade and Investment, said the decline amounts to the loss of $16 million in lobster sales to China in the first seven months of the year as compared to the same period in 2018. Sullivan said the lost sales would be very difficult to make up.
“There’s no one market that can do that,” he said, speaking before the Joint Committee on Export Development.
China imposed a 25% tariff on American imports, including lobster, in July 2018 as a retaliatory measure against United States tariffs on Chinese goods. Then on Sept. 1, China increased that tax to 35%.
“It’s killed our price. It’s killed our markets,” said state Rep. Ann-Margaret Ferrante of Gloucester. “If this continues, the Canadians will have taken advantage and hijacked all of the work that we have done. We will never ever get those trading patterns and relationships back.”
Multiple Massachusetts businesses, especially those in Gloucester, have been adversely affected as they cannot compete with Canadian wholesale prices.
“Canada sells a one-pound lobster to China for $10.70. The U.S. cost is $14.20 per pound,” said Vincent Mortillaro, owner of Gloucester-based Mortillaro Lobster Inc. “We were successful in this market as long as we were able to maintain a competitive price point.”
As of June 2019, Mortillaro’s sales decreased by $5.5 million. He has laid off six people and is now open for business six days a week instead of seven.
“I’m sure we are just collateral damage in this problem,” said Monte Rome, general manager of Intershell, a seafood processing and distribution company also located in Gloucester.
Rome’s company has been selling more lobster domestically to make up for an estimated 65% decrease in overall sales. While he hasn’t had to fire any employees, he has moved into other areas and expanded his plant’s processing of seafood.
China is Massachusetts’ second largest export market, according to Paula Murphy, director of the Massachusetts Export Center. Because China plays such a large role in trade for the state, the impact of this tariff has been particularly critical, said Murphy.
State Rep. Donald Wong and state Sen. Nick Collins, both on the committee, discussed the possibility of finding and establishing new international markets to ease the impact that Chinese tariffs have on future trade.
“I think it speaks to how over-reliant, not just Massachusetts, but as a country, we’ve been on the markets in China,” said Sen. Nick Collins, co-chairman of the committee. “It’s kind of a wake-up call in terms of how we should think about diversifying our portfolio for Massachusetts exporters.”
Rome, though, said trying to introduce lobster to other cultures and markets would be a great challenge. “At the end of the day, to move a product to market you have to have an acceptable price,” he said.
This article was originally published in the Quincy Patriot-Ledger.