The European Commission decided to bring forward its retaliatory measures against US steel and aluminium tariffs and has confirmed duties of 25% on hundreds of American goods, effective as of midnight last night. The tariff applies to all types of recreational boats, except inflatables, imported from America. Other US products on the list, published by the EU on Wednesday include various parts and products made of steel which may be relevant for some marine components and equipment.
Additionally, the EU has outlined further duties applying to a wider list of products in three years, or sooner if the WTO makes a positive finding in its case against the US. The expanded list includes a 10% duty on inflatable boats, in addition to the 25% levy on all other types of recreational boats, and goes as high as 50% on a wide range of other products including steel, ceramic and textile goods.
The EU’s action is the latest salvo in an escalating international trade war instigated by US President Donald Trump which now involves the US, China, Canada, Mexico and the 28 countries of the European Union. The opening gambit was announced by Trump in March consisting of a 25% tariff on steel and 10% tariff on aluminium imported to the US. Primarily targeted at imported metals from China, Trump initially said the EU, Canada and Mexico would be exempt, but those exemptions were reversed in June.
America’s trading partners have responded in kind. China was the first to announce retaliatory duties on 300 products – many commonly used in recreational boats – which are now subject to a 25% duty. Canada also reacted with reciprocal tariffs on C$16.6 billion ($12.5 billion) worth of U.S. exports – including a 10% duty on recreational boats – as of 1 July, and two weeks ago Mexico imposed a 15% tariff on boats along with other popular American imports. Canada, the European Union, and Mexico together account for 69% of annual U.S. boat exports.
The deepening trade tensions this week began on Monday when Trump unleashed another layer of duties on aluminium from China, bringing the total tariff on common alloy aluminium sheet imports to at least 210%.
In a statement announcing its ‘rebalancing measures’, the EU Trade Commissioner Cecilia Malmstrom maintained, “We do not want to be in this position,” adding that the “unilateral and unjustified” US decision had left the EU with no other choice. She described the EU response as “proportionate and in line with World Trade Organization rules" and said that the EU would remove its tariffs if Washington removed theirs.
In guidance to its members, British Marine said it remained unclear how US products already in transit to Europe would be handled but suggested two possible options available to importers including retrospective claims to customs officials, or manual adjustment of tariff rates when the product arrives subject to evidence of shipping dates. As IBI reported on June 12, European dealers have already been cancelling orders of US boats due to the uncertainty surrounding the escalating tariff tensions.
The US boating industry has also been vocal in its objections to the Trump Administration’s actions. Correct Craft’s CEO Bill Yeargin penned an opinion piece in South Florida’s Sun Sentinel newspaper published on Wednesday, outlining the damage a trade war will do to boat builders, their dealers, suppliers and employees – even more so for companies with strong exports. Correct Craft was last year’s recipient of the IBI / METSTRADE Boat Builder Award for International Distributor/Dealer Development Award, with approximately 70% of the company’s exports going to Europe, Canada and Mexico.
The National Marine Manufacturers Association has been active on the tariff issue for several months now and released a fresh alert to members this week calling on members to lobby their representatives in Congress about the escalating trade war. “In an attempt to punish China, the Administration is wreaking havoc on the global economy,” said NMMA president Thom Dammrich. “These harmful policies will have costly effects across American industries, but few are being singled out quite like the US recreational boating industry.” Aluminium boats account for 44% of total new boat sales in America each year, representing $3 billion in retail sales. The aluminium boat segment has been one of the strongest growing categories in the wake of the global financial crisis and one of the first to recover.
NMMA has collaborated with the International Council of Marine Industry Trade Associations and European Boating Industry to send joint industry statements to US and European government officials opposing the tariff actions on both sides of the Atlantic.