On Friday, President Donald Trump’s administration formalised previously announced duties of 25% on Chinese products worth $34 billion imported into the US. Among those products are some 300 marine related items - including engines, navigational equipment and components – commonly used by US boat manufacturers.
The latest round of US duties implements the first phase of so-called ‘Section 301’ tariffs meant to punish China for alleged theft of US intellectual property and could be expanded to additional products covering more than $50 billion of imports.
According to Thom Dammrich, president of the US-based National Marine Manufacturers Association (NMMA) the new duties would add thousands of dollars to some manufacturers’ costs. “There is no way to simply weather the storm and see how this shakes out as the cost of doing business for our members has instantly increased,” explained Dammrich. “We are having a hard time understanding why the President is choosing tariffs when they are directly putting millions of American jobs on the line, including the 650,000 supported by the U.S. recreational boating industry.”
In an interview with Quincy Krosby, chief market strategist at Prudential Financial, Rueters noted that market reaction to Friday’s actions was not unexpected. “The market had a chance to discount today’s actions,” he said. “The question for the market is how far does this go.”
Krosby when on to outline the broader concern for the global economy. “What happens is that uncertainty envelops decision making. The [US] tax cuts had CFOs and CEOs do share buybacks, mergers and acquisitions, sweeten dividends and spend more on capex but the uncertainty tends to freeze any decisions.” Economic uncertainty also impacts consumption.