A month ago, President Trump announced another round of tariff’s against goods coming into the United States from China. Within hours China responded, announcing $34 billion in tariffs on U.S. goods – and for the Keys fishermen still trying to recover from Hurricane Irma, the news was not good.
Gary Nichols has been a lobster fisherman in the Florida Keys for most of his life. He has seen the price for lobster drop to as low as $3 a pound – and he nearly lost everything. Then along came the Chinese.
“We’ve been very fortunate over the last several years with the Chinese market that you’ve seen before where are prices are considerably higher and we were able to have a fairly good standard of living,” Nichols said.
At its height, lobster prices hit $24 a pound. In recent years it has settled in to an average price of about $10. But now the trade war threatens everything.
“If we go back down without this Chinese market, we’re looking at a lobster price that is down in that $5-$6 range which just doesn’t pay the bills,” Nichols said. “With the fuel costs increasing, labor costs increasing, and running these businesses it’s going to be a real struggle – especially coming off a hurricane season where we lost a million dollars and it is going to take years to rebuild after the storm.”
Today, a new storm approaches.
“We can’t continue to allow China to rape our country and that’s what they’re doing. It’s the greatest theft in the history of the world,” Trump has said.
As a candidate, Trump regularly blasted China, accusing its leaders of taking advantage of the United States. And as President he promised action, declaring on Twitter: “Trade wars are good and easy to win”
In March, Trump hit China with a tariff on steel and aluminum. China responded with $3 billion in tariffs on items such as nuts, pork products and sparkling wine.
In April, Trump hit China again with an additional $34 billion in tariffs on Chinese made computers, dish washers and medical devices among others. Those tariffs go into effect as of now.
China immediately fired back with $34 Billion on U-S goods, including Soybeans, cars, beef and whiskey. Those tariffs also set to go into effect today. And tucked into the list of 545 products were lobsters – whether they come from Florida or Maine, and whether they are live, frozen or processed.
“I was really praying that wasn’t going to occur. And at this moment, I don’t know what is going to happen, we’re all just in limbo,” Nichols said.
To stay competitive, the price for lobster is going to have to drop – otherwise buyers in China will simply start purchasing lobster instead from Australia, Brazil or Nicaragua – none of which will have the added cost of a 25 percent tariff.
Jeff Cramer is a longtime Keys commercial fisherman who operates a fish house in Marathon. He buys lobster from as many as 20 different boat captains and then sells them all to his Chinese buyer.
“I’m just hoping our president can resolve this little trade war he’s got going with Europe and China. A lot of us voted for him and maybe this will work out in the long run, but for the short term, it’s really going to devastate us after we had that hurricane last year. A lot of guys are living off the SBA loans that they have to start paying back in a little bit,” Cramer said.
“Let’s see what happens. He got Rocket Man to back down, let’s see if he can get the Chinese president to back down,” Cramer added.
Gary Nichols also voted for Trump and is standing by him.
“I think he’s doing a good job. I really do. He’s a smart man, he’s a lot smarter than I am and he’s a business man that makes a lot of money. I just hope some of these little guys, like ourselves, with little family businesses, he might – I just hope maybe he sees something. I even thought about writing him a letter, trying to be more one on one with him, and get him to see who’s affected. We support twelve working families,” Nichols said.
Both Nichols and Cramer said they understand why the President is engaging in this fight.
“It might be a hit here short term, but maybe in the long term, you know, maybe it will give us a helping hand because we’ve been at a disadvantage and now we are at more of a disadvantage,” Cramer said.
Larry Yee is the main one of several brokers who buy lobster in the United States and then selling it to eager buyers in China.
“Everything looks good until this tariff came in and right now we don’t know what to expect,” Yee said.
CBS4 spoke to Yee as he was on his way to China to try and renegotiate his prices with his distributors and buyers to keep the Florida market in China from collapsing.
Yee said China has always treated the U.S. unfairly – for instance China places a 17 percent tax and duty on lobster imported from the United States. It’s a fee other countries don’t pay.
“Why 17 percent. We shouldn’t pay that at all,” Yee said.
As part of his business, Yee imports fish and crabs from China to the United States.
“There are no taxes here, no import taxes, no duty, no nothing, but for our goods to go into China, yes there are taxes, there’s duty and now tariff. It’s insane,” Yee said.
In the meantime, Nichols never thought his family’s fate could be tied to the outcome of a global trade war. It’s taught him a valuable lesson.
“Sooner or later it does trickle down to the little guy and we are the little guys. But we support this country. We feed a lot of people in this nation. But maybe we all need to back down, take some tax off and let’s do business,” Nichols said.