Following the announcement by U.S. Commerce Secretary Wilbur Ross that Section 232 tariff exemptions for Canada, Mexico, and the European Union expired, resulting in a 25 percent tariff on steel and 10 percent tariff on aluminum, respectively, NMMA is sounding the alarm to the Trump Administration and Congress on the damage to the recreational boating industry.
NMMA President, Thom Dammrich, noted, “The decision to impose tariffs on major trading partners severely harms the $39 billion U.S. recreational boating industry and the 650,000 American workers it supports. Of the marine manufactures that build aluminum boats, the majority use domestic aluminum. The issue with these tariffs is not so much about having to pay higher prices for imported aluminum as it is about the drastic price increases our members are already experiencing from domestic aluminum mills and the severe blow to the competitive global market manufacturers depend on.”
Dammrich continued, “Simply put, these tariffs are a disaster for our industry. All types of recreational boats are on the retaliatory lists from both Canada and the EU. As a result, rather than protecting American manufacturing, these tariffs directly harm the entire recreational boating industry—one of our country’s enduring American-made industries. To make matters worse, Canada, Mexico, and the EU are the top three export markets for American-made marine products and in 2017 they accounted for nearly 70 percent of marine exports.”
“Prior to this formal 232 announcement, NMMA members were already feeling the effects of uncertain trade policy. From an anti-dumping and countervailing duty investigation of common alloy aluminum sheet imports from China, to proposed Section 301 tariffs, the Administration has time and again threatened the recreational boating industry’s growth.
“Today’s decision fails to acknowledge the thriving American manufacturing sector, particularly of marine products. In 2017, total recreational marine expenditures reached a ten year high of $39 billion. This growth was expected to continue into 2018 and beyond, but the Administration’s actions today jeopardize the stability of the industry and ultimately harm every American consumer, worker, and business.
“The marine manufacturing industry relies on free and fair trade, which has been a hallmark of the American economy for decades. By alienating three of our strongest trade partners, triggering retaliatory tariffs, and jeopardizing the future of the North American Free Trade Agreement, our country is now moving away from economic growth and stability. Quite simply, tariffs aren’t the solution. We need Congress to step up and help put a stop to what will inevitably be a severe hit to our nation’s economy. It’s time for the Administration to recognize the negative effects of its current direction and focus on negotiating substantive trade agreements that truly benefit American businesses, consumers and workers.”
NMMA is continuing to be loud on this issue and is addressing our industry’s concerns head on. The association will be updating its members and is encouraging anyone with questions to reach out to NMMA Senior Vice President of Government Relations and Legal Affairs at nvasilaros@nmma.org.
Background:
There are 650,000 American workers who depend on the U.S. recreational boating industry.
The Department of Commerce’s (Commerce) decision to end Section 232 steel and aluminum tariff exemptions for Canada, Mexico, and the European Union threatens to spark retaliatory tariffs, which will directly harm American manufacturers, including marine manufacturers and their workers.
The European Union and Canada have already clearly defined the products that will be the targets of retaliatory tariffs. Both countries include all types of recreational boats on their lists. A full list of the EU retaliatory tariffs can be found here.
Ending these exemptions only exacerbates existing trade tensions between Canada, Mexico, and the U.S., which could undermine efforts to renegotiate the North America Free Trade Agreement—an important element of the recreational boating industry economy.
Additionally, Commerce’s decision to implement a countervailing duty and a proposed anti-dumping tariff on common alloy aluminum sheet will significantly increase the cost of a primary material used to manufacture more than 111,000 new boats annually.
These boats represent 43 percent of new power boat sales each year, and account for $3 billion in retail sales.
95 percent of boats sold in the U.S. are made in the U.S., meaning these sales benefit American businesses and workers alike.
The Department of Commerce has already assessed countervailing duties on common alloy aluminum sheet from China that range from 31 percent to 113 percent. And, Commerce is asking for additional anti-dumping duties of nearly 60 percent on top of the countervailing duties.
This massive tariff will be compounded by the Administration’s 10 percent tariff on all aluminum imports, (Section 232), as well as its newly proposed 25 percent tariff on a long list of products from China (Section 301), which includes marine navigational, component, and engine equipment.
As history has shown, each of these tariffs threaten to increase the cost of manufacturing in the U.S., which will in turn result in less domestic production, higher prices for American consumers, and fewer jobs for American workers.
