Maine’s biggest exports, including lobster, wood pulp and airplane parts, are not targeted by the first round of Chinese tariffs in the brewing trade war with America.

China released its list of 128 U.S. products targeted for tax hikes in retaliation for President Trump’s trade sanctions on Chinese aluminum and steel on Monday, the day after Meifang Zhang, deputy consul general of China’s New York City consulate, arrived in Portland for her visit to Maine. The list included pork, nuts and fruit, aluminum scrap and steel pipes, but Maine’s signature products avoided China’s extra 15 to 25 percent import tax.

But that doesn’t mean that Maine can rest easy, Maine trade experts warn – Trump has said he will levy tariffs on $50 billion in Chinese goods in response to the Chinese theft of intellectual property from U.S. companies doing business in China. While Maine goods might have avoided the first round of tariffs, they could end up on the next one, especially if Trump puts a tariff on Chinese seafood, for example, or one of Maine’s congressional delegates speaks out, they said.

In a meeting with the Portland Press Herald, Zhang talked about these escalating tariffs while emphasizing China’s growing middle class and its hunger for Maine lobster.

“We will not sit idly by,” Zhang said of Trump’s sanctions. “We will adopt measures to protect our interests. We don’t want to see a trade war with any country, especially the United States, because you are China’s largest trading partner. However, we have the confidence and the capability to deal with any challenges that might arise. We hope the U.S. with think cautiously to avoid putting Sino-U.S. trade and commerce in danger. It has not come so easily.”

The 20-year diplomat from Shanghai expressed China’s desire to increase tourism to the United States – 100 million Chinese travel abroad every year, but only 4 million of those visit the U.S. – and to expand the number of Chinese students here. Maine has 1,340 international students, about a fifth of which are Chinese, Zhang said. That number could and should be higher, she said.

But Zhang spent most of her time highlighting the improving relationship between the two countries, which next year will celebrate 40 years of trade, and the growth in its middle class, which is now about 300 million strong and has a robust appetite for luxury items like lobster. In 2017, China imported 17.8 million pounds of U.S. lobster, of which more than 80 percent is landed in Maine, an amount which has increased about 20 percent every year since 2010.

In 2017, China’s appetite for U.S. lobster helped offset declines in European imports, which fell off in part because of a trade deal between Canada and European Union countries that put Maine lobsters at a tariff differential with Canadian lobster. Two thirds of the live lobster sold overseas by the U.S. last year ended up on plates in Asia, up 36 percent from the year before.

“Right now, with the rapid development of China’s economy, we have the emergence of the middle class,” Zhang said. “It is about the size of your beautiful country. And our middle class, they can afford to send their children abroad to school, have good medical, have a nice house and travel domestically and internationally. And they are able to afford lots of luxury goods, like lobster, which is very expensive in our country.”

The Chinese use the “Do as the Romans do” approach to eating, Zhang said. For American food, that means eating Maine lobster and American steak, she said.

Lobster can be had in China’s developed coastal cities by the middle class, but in the interior, it is a luxury reserved only for the very rich, costing over $150, Zhang said.

CAREFUL WATCH

Maine exporters and trade experts have been closely following the news of trade sanctions, but most agree there is not really much they can do to influence international trade relations aside. That doesn’t mean that Wade Merritt, the president of Maine International Trade Center and the state’s director of international trade, didn’t breathe a big sigh of relief on Monday when he saw that Maine had escaped this first round of tariffs relatively unscathed.

But if a Maine export had been targeted, Merritt would have reminded companies exporting that product that tariffs have been around for years, and are just one piece of the trade equation. Maine companies have always been successful because they emphasize the quality of their product and invest in their relationships in their particular business niches, which matters a lot to most buyers, but especially the Chinese, Merritt said.

“As long as they emphasize quality and relationships in their particular niches, Maine companies should be able to weather this,” Merritt said. “There is no other place to buy a Maine lobster except from Maine. Yes, Canada has lobster, but they have a harder time getting their lobster to market and they’re not able to meet all the demand. What I’m saying is, the market isn’t going to go away because of the tariffs. It may put pressure on, but the sky isn’t going to fall.”

The same lobster dealers that helped open up a new market for Maine lobster in China are already working on expanding their product’s reach into other growth areas, especially southeast Asia, Merritt said. Singapore, Thailand, Malaysia and Vietnam have growing middle classes, too, and dealers are working with hotel chefs, who are often the most experimental influencers in those markets, to further develop the national taste for Maine’s signature export, he said.

Annie Tselikis, the director of the Maine Lobster Dealers Association, declined to comment on the story, saying only that her members are following the news carefully.

A luxury item like lobster may be immune, or at least insulated, from the impact of tariffs because the middle class Chinese who can afford to buy it may not care about that higher price, said Kristen Vekasi, an assistant professor of political science at the University of Maine whose research focuses on international political economy in northeast Asia. They may even prefer a higher-priced lobster because it enhances its value as a status symbol, he said.

She points to the example of Johnny Walker whiskey, whose manufacturer lobbied for lower tariffs to increase the its growing market in Japan. At $100 a bottle, Johnny Walker had become enormously popular as a gift there. After liberalization, however, the manufacturer saw its sales in Japan plummet precisely because the customers no longer considered it a luxury item.

Chinese seafood buyers could also obtain Maine lobster through secondary trade routes, which have supplemented direct lobster exports to China for years. But one of the most likely candidates for Maine to use to indirectly supply China’s growing middle-class appetite for lobster is South Korea, whose lobster imports are going up, but that country is enduring a China boycott of its goods right now because of Seoul’s deployment of a U.S. missile shield, Vekasi said.

Penelope Overton can be contacted at 791-6463 or at:

[email protected]

Twitter: PLOvertonPPH

Augusta and Waterville news

Get news and events from your towns in your inbox every Friday.


  • This field is for validation purposes and should be left unchanged.