Joe Savoie, owner of New Brunswick-based SS Trap & Wire, stands next to rolled wire his company uses to produce lobster traps.Ranz Bontogon/The Globe and Mail
The lifespan of a lobster trap is, like pretty much everything else in fishing, a matter mostly beyond one’s control.
A sandy or muddy soft seafloor can buy a trap more than a decade of service. On the other hand, a hard shoal bottom, rough waters, 40-knot winds and an exhausted crew smashing the trap against the side of the boat will slash life expectancy to two seasons.
These days, Nova Scotian fisherman Jason Conrad is doing whatever he can to extend the life of his traps, which have soared in price this year owing to U.S. steel tariffs and may rise even higher with new Canadian steel tariffs coming into effect on Friday.
Layer on Chinese import tariffs targeting Canadian lobsters, which have crippled demand from a massive export market, and the lobster industry here is caught in the eye of a trade war storm.
“Right now, it just seems like there’s three world leaders that are just trying to say, ‘My tariff’s bigger than your tariff,’” said Mr. Conrad.
Can surf and turf survive a trade war?
The lobster fishery is an often-overlooked victim of the various trade wars weighing on Canada, with other sectors like steel and aluminum, auto production and canola regularly garnering more attention.
But the $3-billion a year lobster export market, a major employer in Atlantic Canada, is being buffeted from multiple sides that highlight the compounding effect tariffs and countertariffs have on supply chains and customers.
An SS Trap & Wire worker cuts a square opening into a lobster trap. Companies that produce the cages have been hit by U.S. and Canadian steel tariffs.Ranz Bontogon/The Globe and Mail
The lobster trap is a perfect example of that. The steel that goes into a modern lobster trap often crosses the Canada-U.S. border twice, with steel rods flowing south to be transformed into wire mesh to be brought back into Canada.
Even before U.S. President Donald Trump imposed tariffs as part of his push to rebuild his country’s manufacturing sector, the supply chain and labour disruptions brought on by the pandemic had disrupted that flow and led to higher costs.
Tariffs have pushed prices even higher.
First came Mr. Trump’s Section 232 tariffs on steel imports that began at 25 per cent in March before being increased to 50 per cent in June.
Now, Canada is set to tighten import rules on foreign steel on Dec. 26, including a new 25-per-cent tariff on steel derivative products.
For Riverdale Mills Corp., a company based in Northbridge, Mass., near Boston, which produces much of the wire mesh used in Canadian lobster traps, the tariffs will hit its products coming and going.
Roughly 80 per cent of the steel rods the company buys currently come from Canada, said Jim Knott Jr., Riverdale’s chief executive officer. Since there are no U.S. mills in the region that produce the type of rods Riverdale needs, the cost of freight to buy from mills in Texas or Chicago is prohibitively high.
“We like to trade with the Canadians because they’re nearby, they’re neighbours of ours,” he said.
SS Trap and Wire produces an average of 12,000 traps annually. Some companies, such as U.S.-based Riverdale, have raised prices to offset the costs of import tariffs.Ranz Bontogon/The Globe and Mail
Riverdale then shapes, welds and galvanizes the rods into wire mesh used in traps and other products like fencing. The company provides wire mesh for between 40,000 and 50,000 Canadian lobster traps annually, he said, and the company estimates it supplies roughly 60 per cent of the Canadian market.
But the U.S. tariffs have forced the company to raise prices to cover some, though not all, of the 50-per-cent tariff cost. So far this year, Riverdale has paid US$1-million in U.S. import duties.
Mr. Knott said the impending Canadian tariffs may actually benefit his company because they will “level the playing field” with his rivals in Europe and China. Those rivals have been able to snag market share in Canada because the U.S. steel tariffs make his products less competitive.
“That might help us, but it will place a higher burden on the buyer in Canada,” he said. “It hurts the fishermen, it hurts the industry. Everybody is paying more than they should.”
Joe Savoie estimates his company’s costs have risen between 30 and 40 per cent this year, before accounting for new tariffs coming to effect this week.Ranz Bontogon/The Globe and Mail
In Canada, Joe Savoie, the owner of lobster trap manufacturer SS Trap & Wire in the tiny port community of Tabusintac, N.B., is bracing for the impact from the new Canadian tariffs.
The company produces an average of 12,000 traps annually and employs eight to 12 workers depending on the time of year.
“A lot of the stuff I’m getting from the U.S. came from here to begin with, so it’s a tariff on one side, a tariff on the other, and it just snowballs into major increases in costs,” he said. “And now we’ve got more coming.”
There is cheaper wire mesh available from suppliers in China even after accounting for tariffs, he said, but it is inferior quality and more prone to rusting.
“I understand the ‘elbows up’ stuff. We do everything we can to support as many Canadian businesses as we can, but nobody in Canada makes this stuff so it puts us in a very difficult position,” said Mr. Savoie, who estimated his costs have risen between 30 and 40 per cent this year.
And that’s before the new 25-per-cent Canadian tariff.
“How high can you put up your pricing until your client says, ‘Well, I’m going to pass,’” he said.
For lobster fisherman like Mr. Conrad, the response to the cost increases has been to stretch the life of each trap as far as it can go.
That means taking steps like wrapping worn-down ropes around the corners to protect jagged edges of the wire mesh from getting battered and rusted in stormy seas.
In the past, that tedious activity would have been a waste of his time, but these days he has no choice.
Fisherman who use traps like those produced by SS Trap & Wire are looking to extend their lifespans, adding more pressure on suppliers.Ranz Bontogon/The Globe and Mail
Before the pandemic, lobster traps cost $120. This season he’s heard of a trap selling for $360. Mr. Conrad needs between 60 and 100 traps, depending on the year. They are one of his most significant business costs.
Yet while all his costs are soaring – mackerel bait that once cost 50 cents a pound now costs $2.25 – the price his lobster sells for has not kept pace.
For each pound of lobster sold in the market today, it cost $7 to go and get it, said Mr. Conrad, while the price on offer is around $8.50.
“The catch has got to be good at $8.50 to make any amount of money,” he said.
Low prices have a lot to do with China – one of the East Coast fisherman’s top markets. In March, Beijing slapped tariffs on Canadian agricultural and seafood products in retaliation for Ottawa’s restrictions on electric vehicles. Exports of live lobster have since fallen by 10 per cent.
Which all leaves Mr. Conrad caught in the midst of powerful forces, on the one hand exposed to the trickle-down costs from tariffs, while grappling with low lobster prices and the uncertainty of the season’s haul.
“If it was a sure thing, everybody would be doing it, I guess that’s it,” he said. “You go out. You do your best catch. Make your payments. If you have a good year, great. If you don’t, it is what it is.”