The National Marine Manufacturers Association (NMMA) in the US is urging its members to continue to pressure the Trump Administration to resolve the intensifying global trade war that it says has placed the industry in the “crosshairs”.
In an Action Alert issued Thursday, the NMMA says its membership is facing a “triple threat from Section 232 tariffs on steel and aluminium, anti-dumping and countervailing duties on Chinese aluminium sheet, and 301 tariffs on nearly 300 marine-related products,” resulting in rising costs of raw materials, component parts, and retaliation from trading partners.
The NMMA continues to pressure the Trump Administration to resolve this conflict and is working with Congress on legislative solutions.
Since the Administration's decision to impose tariffs under Section 232 of the Trade Expansion Act of 1962, marine manufacturers have seen substantial price increases for the worldwide cost of aluminium. In addition, after several unsuccessful attempts to negotiate exemptions to Section 232 tariffs, Canada, the European Union and Mexico responded with retaliatory tariffs on US boats, with Mexico’s taking effect immediately.
The NMMA has pledged support for bipartisan legislation introduced by Senator Bob Corker (R-TN) to require Congressional oversight of all proposed trade actions in the name of national security under Section 232. The NMMA is also seeking a permanent exemption for the EU, Canada and Mexico.
The majority of boats entering the EU will face a 25% tariff, while Canada is applying a 10% tariff and Mexico a 15% tariff. This includes all types of recreational boats on their lists, impacting roughly 69% of total US boat exports.
The price of aluminium is also being impacted by a current anti-dumping and countervailing duty investigation on Chinese aluminium sheet. While nearly 90% of US marine manufacturers that use aluminium source it domestically, these investigations have disrupted costs across the globe, resulting in higher prices and supply shortages in the US market.
The compounding effect of Section 232 tariffs and the investigation on Chinese aluminium sheet is stifling the growth and economic viability of the industry's manufacturing sector.
Nearly 300 marine-related products were contained on the initial list of tariffs. Ranging from engines and propellers to marine navigation and component parts, these products would be subject to a 25% tariff. For some products, the additional cost to the consumer would be as much as $2,000.
The association says a trade war with the US will “severely harm” Canada’s $10bn recreational boating industry as well. Approximately 65% of total boat sales in Canada are manufactured in the US. In fact, the US is the top market for both imports and exports in Canada, with engines and boats imported from the US totaling $797m and exports into the US totaling nearly $193m.
The NMMA testified before the Section 301 investigation committee on May 15, requesting marine products be removed from the final list. Additionally, NMMA members submitted over 90 comments to the US Trade Representative during the public comment period.
The final list of imports subject to Section 301 tariffs is scheduled for release on June 15.