The European Union announced the immediate imposition of a 25% tariff on many categories of American-built boats. The EU said this was in retaliation for the 10% and 25% American tariff on European aluminum and steel. The previous week Canada announced a 10% tariff on American-built boats starting July 1, in retaliation for America’s recently imposed tariffs on its metal exports to the U.S. Canada is the #1 importer of U.S.-made boats.

1. EU Hits US made Boats with 25% Tariff
The European Union announced the immediate imposition of a 25% tariff on
many categories of American-built boats. The EU said this was in retaliation for
the 10% and 25% American tariff on European aluminum and steel. The
previous week Canada announced a 10% tariff on American-built boats starting
July 1, in retaliation for America’s recently imposed tariffs on its metal exports
to the U.S. Canada is the #1 importer of U.S.-made boats.
Boating-industry sources say that American boat sales to Canada, Mexico and
the EU account for 70% of all U.S. boat exports. The retaliatory tariffs are
expected to have a dramatic effect on the U.S. boating industry, causing the
layoffs of thousands of American workers.
In the overall scheme of international trade, American boat exports rank pretty
low, amounting to about $1.7 billion – 70% of which is to Canada, Mexico and

2. the EU. Total U.S. exports in 2017 for all products were, reported by Statista,
slightly over $1.5 trillion, which means U.S. boat exports accounted for about
one-tenth of one percent. That’s less than a rounding error for these kinds of
trade statistics.
EU. According to U.S. boating industry statistics, the U.S. boat exports to EU
countries amounts to $338.5 million, or 22% of U.S. boat exports. “A 25-
percent import tax makes our products unmarketable,” said an NMMA
(National Marine Manufacturers Association) spokesman.
Canada. All U.S.-built boats sold in Canada will face a 10% tariff. 100,000 new
and used boats were sold in Canada last year, and 65% of them came from the
U.S., according to Soundings Trade Only, a U.S. boating trade publication.
Canada is the largest importer of U.S.-made boats, accounting for about $700
million in annual sales.
Mexico, which represents $147.4 million or nearly 10 percent of U.S. boat
exports, has announced a 15-percent tariff on all U.S. boats effective
immediately.
The Targeted Boats
The new EU import duties effectively stop all U.S. boat exports from canoes
and kayaks to PWCs to sterndrives and inboard cruisers to megayachts. The
only boats that seem to be excluded are outboard-powered boats and
inflatables to the EU nations.
Currently, about 111,000 aluminum boats are made in the U.S., including
aluminum fishing boats and pontoon boats. Aluminum boats account for about
43% of all boat sales in the U.S. According to an NMMA spokesman, the price
of domestic aluminum has already jumped 20%.
The $39 billion U.S. boating industry supports 650,000 American jobs, said
NMMA president Thom Dammrich in a statement.

3. This is an NMMA graphic showing how the current worldwide trade war is
beginning to affect the marine industry in the U.S. To this drawing can be
added last week’s 10% and 25% tariffs.
It’s a World Economy
We live in a truly global economy and U.S.-built boats are highly regarded
overseas. U.S. exports to Europe and Canada can range from 10% to 35% of a
boatbuilder’s overall sales. For example, Rob Parmentier, the President of the
Larson Boat Group, made up of Larson, Striper, LarsonFX, Escape, and Triumph
brands, 20% of its sales are in Canada.
Exports Have Saved U.S. Boat Builders in the Past
During the dark days of the 10% luxury tax on boats over $100,000 in the early
1990s, European sales kept more than a few U.S. boat builders in business. In
the late ’70s and early ’80s, when U.S. interest rates were 20%, sales to Europe
and Canada saved the industry. And when the financial crisis of 2008-10 hit the
boating industry harder than any other, sales to the robust Canadian economy,
and other pockets of resilience in the world, enabled many builders to stay on
life support.
Echos of Past Disasters
These high tariffs by America’s major trading partners echo the 10% luxury tax
imposed on all new boat sales in the U.S. in 1991 by the U.S. Congress. This law
was designed to have the political optics that Congress was the friend of the
working man, and it was “soaking the rich.” But the rich, the near rich, and
those working on becoming rich, simply stopped buying boats – and spent
their money on other things or invested in securities. It was the workers at
export boats usa, boat companies, both white and blue collar, who lost their
jobs – in the tens of thousands.
Many U.S. Boat builders have their own sophisticated upholstery shops that
employ hundreds of people industry-wide.

4. Tariffs Target Workers. These new tariffs will hit shop floor personnel at
boatbuilding plants all over the U.S. Blue-collar workers will be the hardest hit
by layoffs, because white-collar staffs in the boating industry were taken down
to bare bones in 2009 and have remained extremely lean ever since. Fewer
unit sales mean less work and fewer workers will be needed.
The Ultimate Discretionary Item
Because boats are at the very pinnacle of discretionary purchases, every ripple
in the U.S. or world economy drastically affects sales to a degree far worse
than those felt in non-discretionary products or services. For example, the oil
embargos of the early 1970s slowed American powerboat sales at a far higher
percent than truck or luxury car sales.
20% interest rates of the late ’70s and early ’80s virtually stopped all boat
sales, sail and power, even though general commerce (except housing) still
continued at only a small decreased rate.
The 10% luxury tax in 1991 devastated the industry precisely because no
one needsa boat except a drowning man. General business was doing fine, but
builders of boats costing more than $100,000, wereshutdown, and virtually all
of their workers put on the street. Boat builders were forced to make
fiberglass hot tubs, windmill blades and the like to keep a small workforce
together and have a trickle of income. In this category, the boating industry
largely never recovered.
The financial crisis of 2008 brought the boating business to its knees once
again, and it has only recently recovered to about 70% of its pre-crisis sales.
The lesson learned here is that the 25% European tariff will result in virtually
no sales of American boats in Europe — and that will have significant
consequences for the builders involved and their work force. Read more..