Canadian Lobster Exporters See Temporary Relief from Chinese Tariffs
Canadian lobster exporters are breathing a cautious sigh of relief following China's recent decision to lift tariffs on their products. This move comes as part of a trade agreement where Canada has agreed to drop levies on certain Chinese-made electric vehicles. However, industry experts emphasize that this development offers only a temporary reprieve and does not address the sector's deeper structural challenges.
Persistent Financial Pressures Remain
Despite the tariff relief, Canadian lobster exporters continue to face significant financial pressures. The industry struggles with razor-thin profit margins and an overreliance on a limited number of major markets. Stewart Lamont, managing director of Nova Scotia-based Tangier Lobster Co. Ltd., describes the competitive landscape in China as "cutthroat competition" where buyers aggressively negotiate for discounts, often demanding price reductions in exchange for doubling purchase volumes.
"Years of chasing volume pushed prices down, masked weak returns and left exporters dangerously exposed when trade relations soured," Lamont explained. "We should not have all our eggs in any given basket."
Market Diversification as a Critical Strategy
The recent tariff dispute has highlighted the vulnerabilities of depending too heavily on specific markets. Lamont reported that his company's live lobster sales to China have decreased by at least 30 percent since March 2025, when China initially imposed a 25 percent tariff. According to Statistics Canada, overall Canadian live lobster shipments to China dropped to $11.8 million in October, representing a 31 percent decline from $17.1 million during the same period the previous year.
Lamont emphasized that diversification remains fundamental to the industry's long-term stability. His company has spent four decades cultivating relationships across Europe, the Middle East, and Asia, currently serving 65 to 70 clients in 13 different countries. "My motivating purpose for my entire career was to have options," he stated. "I don't want someone in any part of the world dictating at what price we sell our lobster."
The Temporary Nature of Tariff Relief
Prime Minister Mark Carney recently announced that Ottawa had reached a new trade agreement with China to lift tariffs on lobster and crab, along with duties on canola meal and peas, effective March 1. However, this tariff relief is temporary and is scheduled to expire on December 31, adding uncertainty to the industry's planning.
Lamont acknowledged that the tariff removal was both welcome and long overdue, noting that the duties had weighed heavily on the industry. Yet he stressed that the bigger problem remains profitability. Chinese sales have often proven unprofitable because large-volume buyers can dictate prices, forcing exporters to sell below cost once accounting for freight expenses, lobster mortality rates, and customs delays.
Broader Industry Challenges
Jeff Thompson, president and general manager of Gidney Fisheries Ltd., pointed out that even with tariffs lifted, cash-flow problems persist. Financial institutions are reducing lines of credit, compelling some sellers to move product quickly to maintain cash flow, often at the expense of profit margins.
The industry's experience underscores several critical issues facing Canadian lobster exporters:
- Overreliance on limited markets creates vulnerability to trade disputes
- Thin profit margins leave little buffer against market fluctuations
- Buyer concentration gives major purchasers disproportionate pricing power
- Financial constraints from reduced credit lines force suboptimal selling decisions
While the temporary tariff relief provides some breathing room, Canadian lobster exporters recognize that sustainable success requires addressing these fundamental challenges through market diversification and improved financial resilience.
