President Trump has temporarily excluded the European Union and six additional countries from import tariffs on aluminum and steel.
In a presidential proclamation published late on Thursday, Trump said he would suspend tariffs for Argentina, Australia, Brazil, South Korea, Canada, Mexico and the European Union, the U.S.’s biggest trading partner, until May 1 as discussions continue, according to Reuters.
That comes as good news to the boating industry after the EU had included boats on a long list of U.S. products it planned to impose retaliatory tariffs on, Nicole Vasilaros, vice president of federal and legal affairs for the National Marine Manufacturers Association, told Trade Only Today.
“The industry was very concerned,” Vasilaros said. “If they are able to broker an exemption we’re hopeful that retaliation would be eliminated. It would have affected all boats — fiberglass, aluminum, kayaks and canoes. We’re very happy the administration heard our concerns. Hopefully it will avert a larger trade war that we had feared.”
Europe is the second largest exporter of boats built in the United States, following Canada, according to the NMMA.
“About 90 percent of our manufacturers source [aluminum] domestically, but when you impose tariffs like that, it could result in increased cost in domestic prices and shortage of supply,” Vasilaros said.
The U.S. boating industry manufactures 95 percent of the boats it sells in America,
This aluminum tariff is in addition to tariffs that will result from anti-dumping and countervailing duties on common alloy aluminum sheet from China; that could result in as much as a 60 percent increase in tariffs on aluminum imported from China.
The NMMA, which condemned the sweeping aluminum and steel tariffs, is still urging industry stakeholders to contact their members of Congress to explain how tariffs on aluminum imports would harm the industry.
Aluminum sheet, a specific type of aluminum, is already facing new tariffs in April — potentially higher than 60 percent — because of an “unprecedented move” by the Department of Commerce last month when it initiated an anti-dumping and countervailing investigation on common aluminum sheet metal from China.
The NMMA’s John McKnight was among those who testified before the International Trade Commission during a hearing in December about the potential tax on Common Alloy Aluminum Sheet, saying it would impose “significant price burden” on U.S. marine manufacturers.
“I'm kind of unclear as to why it is that the Commerce Department would actively try to threaten our industry by cutting off the supply of a critical raw material,” especially given its slow recovery from the recession,” McKnight said in his testimony.
A subsequent ruling by the U.S. International Trade Commission, which found imported aluminum sheet metal from China is harming U.S. aluminum manufacturers, allowed for a U.S. probe that will determine whether aluminum alloy sheet from the nation is being dumped or unfairly subsidized.
The investigation will determine whether China is selling the metals to the United States at low prices because Chinese companies are dumping, benefiting from unfair government subsidies, or both.
The NMMA fears the tariffs will drive up the cost of aluminum used to manufacturer more than 111,000 boats — which comprise 43 percent of new powerboat sales.
The group sent out an action alert via Boating United, its grassroots tool designed to mobilize industry stakeholders.
“We are facing a triple threat,” NMMA president Thom Dammrich wrote in the memo issued Wednesday.
See the full memo below:
- The 10 percent worldwide tariff on aluminum recently announced by the Administration will increase the price of aluminum used by marine manufacturers, 90 percent of which is domestically produced. Alone, and at 10 percent, this wouldn't be such a big deal.
- However, the 10 percent tariff is threatening to ignite a trade war, starting with the EU. As a result, $1.7 billion in marine exports could be adversely impacted and damage the global competitiveness of the U.S. marine manufacturing industry.
- The Department of Commerce is considering an ADDITIONAL 60 percent tariff on aluminum sheet, a major input to 43 percent of boats the industry produces, and the majority of trailer manufacturers. Combined with the 10 percent tariff and loss of exports, U.S. marine manufacturers will be forced to increase prices substantially, potentially crippling the market for some new boats.
“With so much at stake for the bulk of our industry, the entire ecosystem is at risk,” Dammrich said, and urged stakeholders to send a prepared letter opposing the tariffs to Congress and the Administration.