Over the past year, the world’s two largest economies have imposed tariffs on each other worth billions of dollars, affecting both their own industry as well as the global economy. The U.S. has accused China of many unfair trading practices along with a very large trade deficit, with China feeling that the U.S. is fighting to curb their rise in global power.
While many industries have been affected by these tariffs, one industry has shown to be an example of how Canada can in turn strengthen their market share of certain industries.
The lobster industry in Canada is not a new industry, and only 10 years ago exports to China only made up a few million dollars. Fast forward to current times with a growing Chinese middle class and the North American export industry of lobster has grown to a multi million-dollar success, which at the beginning of 2018 was equal between the U.S. and Canada at about $84 million each.
But then came the Trump tariffs and retaliatory Chinese tariffs, resulting in a devasting impact on many businesses including the U.S. lobster industry. To date, Maine lobster exports have slumped by 81 percent, with no end in sight as negotiations between countries move at a snail’s pace.
But China still wants North American lobster, and that is where the Canadian lobster industry has stepped up to take its place. By June of 2019, the tide has come in for Canada resulting in $201 million in export sales vs $33 million for the U.S.
And while there is a high likelihood that these tariffs will eventually be lifted, the longer this continues the more opportunity there is for the Canadian supply chains to strengthen while the previous U.S. networks atrophy. When business changes even temporarily, often 100% of business does not return.
The longer the U.S. China trade war lasts, the more advantage there can be to Canadian businesses who turn their sights to the Chinese market, and the further strengthening of networks and logistics lanes there will be.
Is your business missing out on a Chinese market, that the trade war is causing the U.S. to lose share of?
Learn more about at: