PORTLAND — A set of retaliatory tariffs released by China on Friday includes a plan to tax American lobster exports, potentially jeopardizing one of the biggest markets for the premium seafood.
Chinese officials announced the planned lobster tariff along with hundreds of other tariffs amid the country’s escalating trade fight with the United States. China said it wants to place new duties on items such as farm products, autos and seafood starting on July 6.
The announcement could have major ramifications for the U.S. seafood industry and for the economy of the state of Maine, which is home to most of the country’s lobster fishery. China’s interest in U.S. lobster has grown exponentially in recent years, and selling to China has become a major focus of the lobster industry.
“Hopefully cooler heads can prevail and we can get a solution,” said Matt Jacobson, executive director of the Maine Lobster Marketing Collaborative. “It’s a year round customer in China. This isn’t good news at all.”
A Chinese government website on Friday posted a list of seafood products that will be subject to the tariffs, and it included live, fresh and frozen lobster. The website stated that the items would be taxed at 25 percent.
The announcement came in response to President Donald Trump’s own increase in tariffs on Chinese imports in America. The Republican president announced a 25 percent tariff on up to $50 billion worth of Chinese goods on Friday.
The news raised alarms around the Maine lobster industry, as China’s an emerging market for U.S. lobster, which has gained popularity with the growing middle class. Maine lobster was worth more than $430 million at the docks last year, and the industry is a critical piece of the state’s economy, history and heritage.
The U.S. isn’t the only country in the lobster trade. Canada also harvests the same species of lobster and is a major trading partner with China.
“Anything that affects the supply chain is obviously not a great thing,” said Kristan Porter, president of the Maine Lobstermen’s Association. “The lobstermen obviously are concerned with trade and where they go.”
The value of China’s American lobster imports grew from $108.3 million in 2016 to $142.4 million last year. The country barely imported any American lobster a decade ago.
China and the U.S. are major seafood trading partners beyond just lobster, and the new tariffs would apply to dozens of products that China imports from the U.S., including salmon, tuna and crab. The U.S. imported more than $2.7 billion in Chinese seafood last year, and the U.S. exported more than $1.3 billion to China.
“We have the great brain power in Silicon Valley, and China and others steal those secrets,” Trump said on “Fox & Friends.” ”We’re going to protect those secrets. Those are crown jewels for this country.”
The prospect of a U.S.-China trade war jolted financial markets Friday. The Dow Jones industrial average was down more than 220 points in midafternoon trading. Other stock averages also sank.
The U.S. tariffs will cover 1,102 Chinese product lines worth about $50 billion a year. Included are 818 items, worth $34 billion a year, from a list of 1,333 the administration had released in April. After receiving public comment, the U.S. removed 515 product lines from the list, including TVs and some pharmaceuticals, according to a senior administration official who briefed reporters on condition of anonymity.
The administration is targeting an additional 284 Chinese products, which it says benefit from Beijing’s strong-armed industrial policies, worth $16 billion a year. But it won’t impose those tariffs until it gathers public comments. U.S. companies that rely on the targeted imports — and can’t find substitutes — can apply for exemptions from the tariffs.
The Trump administration has sought to protect consumers from a direct impact from the tariffs, which amount to a tax on imports. The tariffs target mainly Chinese industrial machinery, aerospace parts and communications technology, while sparing such consumer goods as smartphones, TVs, toys and clothes that Americans purchase by the truckload from China.
These tariffs will impose higher costs on U.S. companies that use the equipment. And over time, those costs could be passed on to consumers. But the impact won’t be as visible as it would be if consumer products were taxed directly.
By contrast, the Trump administration earlier this year imposed steep tariffs on imported washing machines. By May, the cost of laundry equipment had jumped 17 percent from two months earlier, according to government data.
The administration characterized the tariffs it announced Friday as entirely proper.
Wall Street has viewed the escalating trade tensions with concern, fearful that they could strangle economic growth and undermine the benefits of the tax cuts Trump signed into law last year.
“Imposing tariffs places the cost of China’s unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers, and ranchers,” said Thomas Donohue, president of the U.S. Chamber of Commerce. “This is not the right approach.”
Political reactions to Friday’s announced tariffs cut across party lines. Senate Minority Leader Chuck Schumer, D-New York, said Trump was “right on target.”
“China is our real trade enemy, and their theft of intellectual property and their refusal to let our companies compete fairly threatens millions of future American jobs,” Schumer added.
But Rep. Dave Reichert, R-Washington, said he disagreed with the action because “Americans will bear the brunt instead of China.”
AP writers Paul Wiseman, Ken Thomas, Christopher Rugaber, Kevin Freking and Martin Crutsinger contributed to this report.
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