President Trump announced a new round of tariffs on China that would affect marine components being imported from there, further jeopardizing strong growth in the industry, said the National Marine Manufacturers Association.
The Trump administration on Friday announced another round of tariffs under Section 301, imposing a 25 percent duty on approximately $50 billion worth of 1,300 Chinese products, including nearly 300 marine-related parts ranging from propellers to engines to marine navigational equipment.
“The U.S. recreational boating industry – a $39 billion industry that supports 650,000 American jobs – experienced another setback due to the Trump Administration’s actions on trade,” said NMMA president Thom Dammrich in a statement.
“Today’s announcement on 301 tariffs once again puts our proud, uniquely American-made industry at the mercy of bad trade policies that are piling up on top of each other,” Dammrich said. “Collectively, these tariffs are causing the price of raw materials and marine parts to rise rapidly and stifling U.S. boat exports.”
The NMMA held a webinar focusing on the previously-announced tariffs affecting the U.S. marine industry last week to help boatbuilders and components manufacturers understand that not just aluminum boats will be affected.
The president is utilizing decades-old laws and unconventional methods with some of our closest allies, prompting retaliatory tariffs on all new and used boats exported to those countries, Nicole Vasilaros, NMMA senior vice president of government relations and legal affairs, said during the webinar.
“There’s a little bit of confusion out there that this is only impacting aluminum boats,” said Vasilaros.
There are three main areas that will be affected — raw materials, components and exports.
Tariffs on aluminum sheet that resulted from an uninitiated antidumping and countervailing investigation on China by the Commerce Department has resulted in increased prices worldwide on the cost of aluminum, as well as supply shortages and concerns in the domestic market, Vasilaros said.
“We’ve already seen nearly a 20 percent increase in worldwide price of aluminum,” Vasilaros said. “We know 90 percent of manufacturers source domestically, but combination” of tariffs are causing cost increases. “We expect that continue.”
The nation’s three largest export markets have already threatened or imposed retaliatory tariffs.
In 2017, the industry saw a 9.6 percent increase on exported boats with about a $1.7 billion value. Retaliation is on all boats, new and used, and apply to the entire boat package. Engines exported alone are not included.
Canada represents $562 million or 37 percent of U.S. boat exports, said NMMA Canada president Sara Anghel during the webinar.
More than 100,000 new and preowned boats are sold in Canada last year, and more than 65 percent come from the United States.
“We have some specific asks of the prime minister and the entire government in Canada,” said Anghel. “First and foremost, specifically to have recreational boats removed from the list; it’s the only recreational product included on the list, so it’s unjustified and unfair.”
The EU, which has proposed a 25 percent tariff against U.S.-built boats, represents $338.5, or 22 percent, of U.S. boat exports.
Mexico, which represents $147.4 million or 10 percent of U.S. boat exports, announced a 15 percent tariff on U.S. boats effective immediately.
Retaliatory tariffs have prompted dealers to cancel orders.
“It has really become an unfortunate situation,” Vasilaros said. “It is a political move. Our allies are making a political stance against the president,” and are targeting U.S. based manufacturers and products “rom boats to beer to bluejeans.”
Vasilaros asked the entire industry to sign a petition to President Trump. “We want to have thousands of names on this,” she said.
See the whole webinar here.