Boats face tariffs in top three export markets - Trade Only Today

Boats face tariffs in top three export markets

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More than half the boats sold in the U.S. are made of aluminum, like this Smoker Craft F20. Photo courtesy of Yamaha.

More than half the boats sold in the U.S. are made of aluminum, like this Smoker Craft F20. Photo courtesy of Yamaha.

The National Marine Manufacturers Association issued a Boating United alert urging members and recreational marine stakeholders to sign a petition asking President Trump to reconsider tariffs on aluminum and steel.

“The escalating trade war is threatening the entire recreational boating industry,” the NMMA wrote in the alert.

Boats entering the EU will face a 25 percent tariff while Canada is applying a 10 percent tariff and Mexico a 15 percent tariff, according to the NMMA. Canada is the No. 1 importer of boats.

“This will make our industry less globally competitive in our top three export markets,” the alert read.

Aluminum is used to build more than half of all boats sold in the United States (excluding personal watercraft), and 90 percent of boats sold to Americans are built in the country.

Aluminum boat sales, which can typically be purchased at a lower price point than fiberglass boats, have led overall industry growth post-recession, according to data from Statistical Surveys Inc.

Excluding PWCs, aluminum boat sales grew 6.28 percent in 2015, well ahead of the 4.59 percent growth of fiberglass boats. In 2016 the trajectory continued, with 6.4 percent growth in aluminum boat sales versus 5.23 percent growth in sales of fiberglass boats.

Last year, 118,433 aluminum boats were registered in the United States, versus 91,504 fiberglass boats.

Winnebago CEO Michael Happe said Thursday that there has been increasing pressure on the commodities side.

“I’m not necessarily a fan of the broad brush the administration is taking with tariffs on allies,” said Happe during Baird's 2018 Global Consumer, Technology and Services Conference.

“We actually source 90 percent of our steel and aluminum from domestic sources, but the pricing umbrella has been lifted by tariffs, so we’re seeing even domestic sources lifting pricing in double digits,” Happe said.

Steel and aluminum is a material part of the RV products, though a little less the fiberglass boats Chris-Craft builds.

“But the marine segment is seeing its own cost pressures in other ways as well,” Happe said. The company is working with suppliers to share cost increases, but some ultimately gets passed onto the consumer, he said.

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