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ABC: Boating industry facing “perfect trade storm” of aluminum tariffs

The boating industry is facing a “perfect trade storm” of three different aluminum tariffs that are impacting supply and pricing, according to a panel at the NMMA’s American Boating Congress (ABC). “The effect on trade is real, and it’s impacting the bottom line of our manufacturers,” said Nicole Vasilaros, vice president of federal and legal affairs for the NMMA.

Prices in aluminum have fluctuated wildly in the last six months, at times jumping 30 percent, while supply of sheet aluminum used for making boats has become limited. Some pontoon boat builders, said Vasilaros, expect additional costs from the tariffs to add between $750 and $4,000 to each boat. A representative from Dometic said that its suppliers have warned of 15 percent price increases for materials used in air-conditioning compressors, and that those prices could change monthly.

Three different types of tariffs are being levied on steel and aluminum. Section 232 of the Trade Expansion Act of 1962 allows the president to restrict imports for national security, including economic security. The tariffs include 10 percent on imported aluminum and 25 percent on steel. The NMMA has formed a coalition with the Recreational Vehicle Industry Association (RVIA) and National Association of Trailer Manufacturers (NATM) to lobby against the tariffs.

The EU has threatened to retaliate with tariffs on all U.S.-made boats imported into Europe, a move to penalize specific U.S. industries like recreational boating.

The 301 Investigation by the US Trade Representative has levied an additional 25 percent tariff on Chinese imports, including aluminum and steel products used in boat, motor and equipment production. These tariffs could come into effect as early as June. These tariffs are for intellectual property theft by Chinese businesses, but the panelists said many items on the list seem arbitrary. “There has just been a proposal to add steel trailer wheels to the list,” said Kristin Heim Mowry, a partner at trade specialists Mowry & Grimson. “That could just be a US manufacturer of these products wanting the government to penalize a Chinese competitor. It doesn’t seem to have much to do with intellectual property.”

Heim Mowry said that the 232 and 301 tariffs could possibly “go away” in the next few years. She is more concerned about the third tariff, or Antidumping and Countervailing Duties, handled by the Department of Commerce (DOC) and International Trade Commission (ITC). The Commerce department announced preliminary CVD duties, ranging from 31 percent to 115 percent on specific Chinese companies. “These kinds of tariffs are cumulative and could go on for generations,” she said.

The panelists urged ABC attendees to speak with members of Congress about their concerns on tariffs, and to speak at upcoming ITC hearings on July 17. “It’s important that we emphasize how many manufacturing jobs are dependent on having access to aluminum at reasonable prices,” said Vasilaros, noting that aluminum boat builders employ 22,000 workers. “We’re talking about $3 billion in sales with 111,000 aluminum powerboats sold last year, and another 205,000 boat trailers. The economic impact is significant.”

The NMMA will be seeking comments from its members on both the ITC and 301 investigations. 

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