The Maine and New Brunswick lobster industries are facing potential financial losses as a result of an escalating global trade war and declining consumer confidence. The possible impact of the twin threats were discussed during a webinar organized by the Island Institute on April 3. The lobster industry has thus far avoided tariffs from either the U.S. or Canada, with the United States-Mexico-Canada Agreement trade agreement protecting shellfish from a U.S. import tariff and Canada excluding lobster from the retaliatory tariff package announced on March 4.
      “That doesn’t mean we’re out of the woods or that we won’t see new tariffs in the future,” said Eric Miller, President of the Rideau Potomac Strategy Group in Washington, D.C. He cautioned that companies should expect retaliatory tariffs from markets in Europe and Asia as the trade war escalates, meaning new overseas markets for products such as lobster pate could be impacted.
      Even as U.S. and Canadian tariffs remain at bay, China announced a 25% tariff on Canadian seafood on March 8. China is Canada’s biggest export market for live lobster, some of which originates in Maine. Some perspective about the impact can be gleaned from 2018, when President Trump’s tariff policy prompted China to put a 25% tariff on lobster imports from the U.S. That led to a 50% decrease of U.S. lobster exports to China the following year, and an ensuing doubling of Canada’s exports of live lobster to China in 2019. As of 2025, lobster is one of Canada’s largest exports to China, with $51.4 million in exports in January 2025 alone.
      “It’s hard to say where this will end, but it is safe to say that these tariffs are likely to be in place for a long time to come and the old world of low cost trade and low cost shipping… is going away,” Miller said, adding, “No matter what happens, people are going to be spending a lot more time doing compliance paperwork and showing where their goods came from.”
      The ability to trade freely and easily is significant to the high volume, low margin lobster industry, which Luke Holden of Luke’s Lobster in Portland describes as “completely comingled” between the U.S. and Canada. Maine lacks sufficient processing facilities for the 90 million pounds of lobster it harvests each year, Holden explained. To help handle the supply, approximately half the catch is sent to Canada. Of that amount, Holden approximates that “at least 75% of it comes back to the U.S. where the majority of the market is,” while the rest of the processed meat is exported to other markets.
      One way or another, the uncertainty in the global trade market and tariffs on virtually all secondary goods involved in the industry will result in increased costs. Figuring out how to handle those higher costs is a challenge, Holden said. There are generally three ways to do so – with the company either absorbing the cost, pushing them back onto the supplier or passing them onto consumers “who already thought the world was too expensive.”
      Beyond the actual increase of the costs involved, there’s another important factor at play – consumer confidence. It will be largely the consumers who decide what they are willing to pay for lobsters, which Holden acknowledged are not a necessity. “At the end of the day, lobster is a luxury item, and people are only willing to pay for that when they’ve got confidence in the economy.” Because of that, he said, “Lack of confidence is our biggest concern.”
      Holden closed with a message of hopeful persistence, channeling the Island Institute’s core message. “It’s an incredibly resilient industry. We’ve worked through harder hurdles in my opinion.”