Tariffs fears prompt price increases - Trade Only Today

Tariffs fears prompt price increases

Author:
Publish date:
  Some builders are already seeing prices increase due to fears of aluminum tariffs  

  Some builders are already seeing prices increase due to fears of aluminum tariffs  

Despite three days of testimony on Capitol Hill from more than 100 associations opposing a tariff on imports from China, which marine manufacturers say have already increased price of raw materials, a 25 percent duty has been imposed on more than 1,300 Chinese products.

Aluminum prices have been up as much as 30 percent and fluctuate daily due to tariff uncertainty, National Marine Manufacturers Association president Thom Dammrich told Trade Only Today.

“It is safe to say that aluminum prices are up 20 percent in the past six months,” said Dammrich. “This affects each company differently based on their contracts with their suppliers. But, clearly prices of aluminum and other raw materials are trending up.”

“Many of the boat building industry suppliers are facing potential increases from tariffs on raw materials,” Yamaha WaterCraft Group president Dean Burnett told Trade Only. “We need to maintain strong favorable trade agreements so there is no downstream impact on marine manufacturing industries in the U.S.”

The NMMA was among the groups to testify before the U.S. Trade Representative in opposition of President Trump’s decision to use section 301 of the Trade Act of 1974 to impose $50 billion in tariffs on Chinese exports to punish the country for alleged theft of U.S. intellectual property.

“Marine manufacturers have serious concerns regarding the inclusion of recreational marine products and component parts on this list,” said NMMA legal and federal affairs vice president Nicole Vasilaros in her testimony this week.

Products including marine hydro jet engines, marine combustion engines, propellers and fuel injection pumps “are critical” to the propulsion and operability of recreational vessels, said Vasilaros.

“Subjecting these items to a 25 percent tariff will not penalize Chinese companies but rather American businesses that import these essential components and American consumers who will pay more for final products including these items,” Vasilaros said. (See her full testimony here.)

The proposed tariff action by USTR sparked such an outcry from those impacted that what was supposed to be a one-day hearing has been expanded to three days.

Despite the opposition, the U.S. Trade Representative issued a long list of products that will be imposed with a 25 percent tariff when imported from China, according to the NMMA.

The NMMA urged marine manufacturers to check the list to determine how they will be affected.

Three different types of tariffs are being levied on steel and aluminum. Aside from the one above, two others stem from countervailing and anti-dumping investigations the Commerce Department initiated in November on common aluminum sheet metal from China.

The U.S. Commerce Department announced the countervailing tariff amounts on aluminum sheet from China in April, with varying amounts imposed on different Chinese suppliers.

Some pontoon boat builders expect additional costs from the tariffs to add between $750 and $4,000 to each boat, said Vasilaros at ABC.

The European Union said it would impose a variety of retaliatory tariffs on U.S. exports in response to the 25 percent duty on steel, and included recreational boats on its list of targets. It has not yet issued a response to the aluminum duties.

Related