A trade war between the United States and China officially started today as the Trump administration has followed through with its threat to impose tariffs on $34 billion worth of Chinese products.
Chinese steel (25 percent tariff) and aluminum (10 percent) have already been attracting import duties, but now so are dozens of other products used for building boats and marine engines. The list includes such items as DC and AC generators, propellers and other components. Trade groups such as the NMMA have warned for months that the tariffs will hurt U.S. boat and equipment manufacturers.
After months of talk, the escalation of the trade war into reality is expected to disrupt global supply chains while raising costs for businesses and U.S. consumers. Chinese officials, according to the New York Times, said the country would retaliate by levying $34 billion in tariffs on U.S. exports such as pork, soybeans and automobiles.
The Trump Administration said it plans to place tariffs on another $16 billion worth of Chinese products by August and has warned China it could eventually levy tariffs on as much as $450 billion worth of goods.
The tariffs on imported steel and aluminum have caused prices to rise as much as 30 percent across the board, as domestic producers have raised prices to match the tariff-added imports. Recent cases by the International Trade Commission will place additional duties on Chinese-imported aluminum from some Chinese firms of more than 200 percent.
For the boating industry, the tariffs on Chinese goods have been compounded by retaliatory tariffs from Canada and the European Union, which have specifically targeted U.S. boatbuilders. Canada’s 10 percent tariff on imported boats from the United States started July 1, while the 25 percent tariff levied by the European Union began a day later. Both tariffs have caused dealers in the E.U. and Canada to cancel tens of millions of dollars worth of U.S. boat orders.
“We recognize the need to deal with unfair trade practices by the Chinese, but the actions undertaken by this Administration will hurt U.S. manufacturers more than help them,” NMMA president Thom Dammrich said recently. “U.S. manufacturing — more specifically, the recreational boating industry — will suffer. We need this Administration to recognize the harmful effects of its current direction.”
At this point, there is no sign that the Trump administration plans to back down on the tariffs.
According to the Wall Street Journal, experts in China say that the two sides are likely to start negotiating when the tariffs cause global stock markets to react. U.S. officials say Trump closely follows the impact of his trade actions on U.S. markets, which was one reason he backed off plans for investment restrictions.
A Chinese official told the paper that its national media have been instructed not to play up the trade war. “We’re being forced to respond to U.S. tariffs, and we’re doing so in a measured way,” the official told the Wall Street Journal.