With a 10% tariff on US-made boats exported to Canada set to take effect Friday, a group of Indiana manufacturers, representing 10 different industries that use aluminium and steel, met Tuesday with US Secretary of Commerce Wilbur Ross to discuss the Administration’s trade policies and their effect.
The meeting was arranged by Congresswoman Jackie Walorski,and included boating industry representatives Nicole Vasilaros of the National Marine Manufacturers Association (NMMA) and Doug Smoker, president of Smoker Craft boats, who told IBI he was surprised by what he saw and heard.
“We went in with the idea that we would have very little time with the Secretary, but the meeting lasted well over an hour. [Secretary Ross] was very engaging, listened very closely and seemed genuinely interested and concerned,” Smoker said.
In an interview Wednesday, Smoker reported that most of the attendees have applied for exclusions from the tariffs to ease the time and cost burden of transitioning to domestically sourced metals. He said Secretary Ross told the group it is taking time to process the requests and he believes many of the exclusions will be granted in a matter of time.
“We committed five years ago to use domestic aluminium, so the tariffs on foreign metal made no difference to us,” Smoker said. “What we’ve seen is a rapid increase in prices because of the tariffs and the demand for US domestic product.”
Smoker Craft has seen double-digit percentage increases in the price of domestic aluminium ingot. In addition, the industry has been hit with increased pricing on imported components and parts, and looming on July 1 is a retaliatory 10% tariff on US boats into Canada, about 30% of the company’s business.
Smoker, whose family has been building aluminium boats since 1963, has weathered the ups and downs of the cyclical marine industry. “I don’t think we’ve ever been in a position like this before, and stated that during the meeting,” he said. “It’s very confusing. If we increase prices to where we should, you’re placing yourself in a position where people can buy golf clubs or swimming pools or any alternative to boating.”
Several times during the course of the interview, Smoker reiterated a “surprising” level of engagement and genuine concern expressed by the Commerce head. “Secretary Ross was very receptive and expressed genuine concern. Time will tell if anything comes of it.”
Last Friday, the European Union levied a 25% tariff on US boats, following Mexico’s implementation of a 15% tariff earlier this month. Canada is expected to apply a 10% tariff on US boats starting this Friday.
Boats are the only recreational product targeted by all three jurisdictions – which collectively account for 69% of annual US boat exports.