Chinese tariff relief offers temporary respite for Canadian lobster exporters, but they still face deep financial pressure
Canadian lobster exporters are welcoming China’s recent decision to lift tariffs in exchange for Canada dropping levies on some Chinese-made electric vehicles , but industry veterans say it doesn’t solve the sector’s deeper problems of thin margins and a reliance on a few big markets.
It also doesn’t change that sellers still have to mostly deal with hard-nosed buyers in China or the United States that take advantage of market forces and prices when they can.
Stewart Lamont, managing director of Nova Scotia-based Tangier Lobster Co. Ltd., said the pressure to chase volume in China amounts to “cutthroat competition” and said buyers often aggressively negotiate and ask for discounts to double the amount purchased.
“Years of chasing volume pushed prices down, masked weak returns and left exporters dangerously exposed when trade relations soured,” he said. “We should not have all our eggs in any given basket.”
Lamont said his company’s sales of live lobster to China have fallen by at least 30 per cent since the country imposed a 25 per cent tariff in March 2025. Overall, Canadian live lobster shipments to China dropped to $11.8 million in October, down 31 per cent from $17.1 million a year earlier, according to Statistics Canada.
Prime Minister Mark Carney last week said Ottawa had reached a new trade agreement with China to lift tariffs on lobster and crab — along with duties on canola meal and peas — beginning March 1. The tariff relief is temporary and expires Dec. 31.
Lamont said the tariffs weighed heavily on the industry and the move to lift them last week was both welcome and long overdue.
He said sales to three Chinese customers once accounted for about 10 per cent of Tangier Lobster’s business, but that has fallen to roughly two per cent over the past year. The company has spent four decades selling lobster into markets across Europe, the Middle East and Asia.
But Lamont, a founder of the Lobster Council of Canada, said the bigger problem is profitability.
He said Chinese sales have often been unprofitable because large-volume buyers can dictate prices, forcing exporters to sell below cost once freight, lobster mortality and customs delays are factored in, which is why diversification is key.
“My motivating purpose for my entire career was to have options,” he said. “We have 65 or 70 clients in 13 countries. I don’t pretend it’s easy, but it’s fundamental. I don’t want someone in any part of the world dictating at what price we sell our lobster.”
China has never represented more than about 10 per cent of his business, he said.
Jeff Thompson, president and general manager of Gidney Fisheries Ltd., said tariffs may be lifted, but there is still a cash-flow problem. Banks are reducing lines of credit, forcing some sellers to move product quickly to maintain cash flow, often at the expense of margins.
“It’s not working for anybody,” he said. “Fishermen, buyers, small exporters … everyone’s getting squeezed.”
Gidney Fisheries sells internationally, including to the U.S., Europe and the United Arab Emirates, as well as China, which has historically represented about 15 per cent of its business. Thompson said Chinese buyers purchase in bulk when prices are low and wait when prices rise.
“Sometimes you’ll settle for a lower return from Chinese buyers because you need the cash desperately,” he said. “You can’t afford to sit on it.”
Thompson said his company hasn’t made money in years.
Between January and October 2025, Canada shipped just 19.3 million pounds of live lobster to China, down nearly 40 per cent from 31.6 million pounds the year before, according to data from Global Trade Tracker, which draws upon Statistics Canada and U.S. Census Bureau figures.
The average price per pound rose slightly to US$10.02 from US$9.75 during that same period, and the drop in volume meant total revenue fell by 37 per cent to US$193.2 million from US$307.9 million.
Lamont said even higher per-pound prices don’t make Chinese sales profitable when shipping costs, mortality and customs delays are considered.
As a result, sellers recognize diversification is the most reliable hedge, Lamont and Thompson said. Companies that can sell into multiple markets — Europe, South Korea, Malaysia or Mexico — are insulated from Chinese market volatility.
But Thompson said systemic issues, such as uncontrolled local pricing and a lack of co-ordination between fishermen and buyers, exacerbate financial strain.
The concern extends beyond individual companies. Atlantic Canada’s rural communities heavily rely on the lobster industry, so prolonged financial stress in that industry threatens jobs and local economies.
“We need options, diversification and better control over margins,” Lamont said. “Otherwise, we’re leaving the industry exposed to external shocks.”
Geoff Irvine, executive director of the Lobster Council of Canada, said China isn’t entirely to blame.
“While tariffs temporarily hurt competitiveness, the real challenge lies in the industry’s structure: reliance on a few large markets, cash-flow pressures and the need to move huge volumes during peak seasons,” he said. “One of the beauties of China is that, at the right price, they can take volumes and we need that.”
Still, accessing more markets is better in the long run, Irvine said, which is why companies have been heading to Europe.
“We’re going to Europe in two weeks with a dozen companies to sell seafood from here as part of that diversification effort,” he said.
They’re also trying to diversify by courting buyers in the Middle East and Southeast Asia.
“It’s critical to the health of the industry,” he said.
• Email: arankin@postmedia.com