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International marine industry hopes to head off trade war

New data released Wednesday showed that almost 38 percent of the boats sold in 2017 were made of aluminum; the aluminum pontoon segment, which has been the strongest segment post-recession, saw 7.8 percent growth.

New data released Wednesday showed that almost 38 percent of the boats sold in 2017 were made of aluminum; the aluminum pontoon segment, which has been the strongest segment post-recession, saw 7.8 percent growth.

The international marine industry is joining together in its call for a solution to a potential trade war.

The International Council of Marine Industry Associations and the European Boating Industry have joined the National Marine Manufacturers Association in calling for a constructive solution to the current trade escalation between the United States and the European Union, according to the NMMA.

“At the risk of repeating the vast majority of economic experts: there is no winner in a trade war,” the groups wrote in a joint statement shared with the Trump Administration.

“We are concerned that the recreational boating industry is being caught in the middle of a political battle, with extremely serious consequences for the sector on both sides of the Atlantic,” the letter said.

President Trump’s recent announcement to impose a 10 percent worldwide import tariff on aluminum and a 25 percent tariff on steel has faced criticism abroad, including a proposal by the European Union to put some U.S.-made products — including recreational boats — on a retaliatory tariff list, the groups wrote.

The groups pointed to a move in 2002 by the Bush Administration that imposed tariffs ranging from 8 percent to 30 percent on a wide range of steel products.

During that dispute, the EU notified the World Trade Organization that it reserved its right to rebalance the adverse effect of the U.S. steel safeguards. It subsequently issued a list of products — which included motor boats, the statement said.

“As a result, 200,000 jobs were lost in the USA, in the steel industry and in downstream industries,” the groups said.

The EU is the second biggest trading partner for American boat manufacturers.

In 2016, $217.4 million worth of boats and $148.3 million worth of engines from the United States was exported to the EU market, totaling 18.4 percent of all U.S. exports.

“Today, while protecting the European market with safeguard measures is unlikely to achieve its objective, the decision of President Trump to impose import duties on steel and aluminum will definitely affect the European boating industry,” the groups said. “It will undermine the recent recovery of an industry which was badly damaged by the 2008-09 economic crisis, but which is still a significant contributor to the European economy, employing more than 280,000 people.”

They continued, “It will severely impact the U.S. economy as well, resulting in higher costs for aluminum as a critical raw material for boat building and reducing U.S. global competitiveness should recreational craft be placed on retaliatory tariff lists.”

The NMMA condemned the Trump Administration’s move last week to impose the tariffs. That would be on top of even larger duties on aluminum sheet proposed by the Department of Commerce that the industry is fighting.

Trump’s announcement came as members of the marine industry converged on Capitol Hill to make their case against the antidumping and countervailing investigation that could raise tariffs on imported aluminum sheet as much as 60 percent.

The NMMA says those will drive up the cost of aluminum used to manufacture aluminum boats such as pontoons and fishing models.

The group has emphasized that even manufacturers that source aluminum sheet domestically will likely be affected by shortages and price increases.

New data shows that 102,707 aluminum boats were sold in 2017, with aluminum fishing boat sales rising 4.2 percent and pontoons growing 7.8 percent.

“It’s a big chunk of the marine industry,” said Statistical Surveys sales director Ryan Kloppe.

"The statement was made in conjunction with our partners in Europe given the far-reaching impacts of the two separate tariffs on aluminum," NMMA spokeswoman Ellen Hopkins told Trade Only Today in an email.

"The impact of a 10 percent worldwide tariff on aluminum, on top of the pending investigation on aluminum sheet, which could result in 60-plus percent additional tariffs, has all segments of our industry concerned," Hopkins said.

"A combined 70-plus percent tariff on aluminum could result in significant supply disruptions, increased costs of aluminum from U.S. mills, and, as we have already seen from Europe, retaliation on all U.S. boats being exported to the EU," Hopkins said.

As a result, European counterparts share the NMMA's concerns, she said.

"They see these efforts diminishing the industry on their side of the Atlantic, in addition to the U.S.. and together we seek to find a balanced partnership between the U.S. and EU that results in growth for the global marine industry," Hopkins said.



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