America’s
boat builders and recreational vehicle manufacturers are each fearful
the Trump Administration’s new tariffs will erode profits, stifle
growth, and create unemployment within their respective communities.
Indeed,
both recreational-dependent industries are seeing the cost of
manufacturing goods all ready escalating with no ceiling in sight.
All due to the addition of tariffs on imported aluminum and steel for
starters.
And
at the other end of the product pipe line are retaliatory extra
charges being assessed on finished goods. Canada, Mexico and the
European Union are all attaching their own punitive import taxes on
boats shipped from the U.S. And those markets account for fully 69
percent of all manufactured boats exported from this country,
industry spokesmen say.
More
specifically the U.S. recreational boating industry says it is facing
a triple threat from tariffs on steel and aluminum, as well as
anti-dumping claims on what are called countervailing duties on
Chinese aluminum sheet, along with tariffs on nearly 300 marine
related products.
The
negative impact of such add-on fees, tariffs and the like could
result in a loss of up to $1.7 billion for the boat-building industry
alone, says the National Marine Manufacturers Association.
In
effect, the Association – along with the European Boating Industry
trade organization and the International Council of Marine Marine
Industry Associations – collectively say their industry is being
caught in the middle of economic trench warfare, “with extremely
serious consequences for the sector on both sides of the Atlantic.”
“President
Trump’s recent announcement to impose a worldwide 10-percent import
tariff on aluminum and 25-percent tariff on steel has faced criticism
abroad, including a proposal by the European Union to put a range of
US made products, including recreational vessels, on a retaliatory
tariff list,” the three partners say in a joint communique.
In
the U.S., the recreational boating industry contributes $38.2 billion
in gross domestic product, supports 35,000 businesses and 650,000
direct and indirect jobs, the partnership says in hammering home the
economic value of their operations.
Thus
any additional cost on metals will drive up prices and drive away
buyers, the industry says.
“Aluminum
is a critical raw material for boat and marine component
manufacturing, and increased costs for US manufacturers to source
this product will disrupt sales to a pontoon and aluminum fishing
segment that accounted for $3 billion in U.S. sales and 110,000
boats,” says the three organizations also.
Using
history as a backdrop, the three groups note that a similar trade war
in 2002 under the-then
George H.W. Bush Administration saw a cascading effect that caused a
loss of some 200,000
marine-related jobs in this
country.
“There
is no winner in a trade war,” the marine industry lobbying
triumvirate says.
“We
have in the past expressed our subscription to the idea that mutually
beneficial economic growth is achievable through tariff elimination,
simplified certification procedures and internationally harmonized
standards,” the partners add.
“We
reiterate our conviction that a reasonable and balanced partnership
between the USA and the EU, which does not threaten growth, jobs and
innovation, is the only sustainable way forward.”
Alarmed
as well is this country’s recreational vehicle industry, an
economic segment that interestingly enough has very strong ties with
Indiana. That is the state in which Vice President Mike Spence hails
from and for which he served as governor prior to being selected by
Trump to serve as his second in command.
Indeed,
Indiana’s strong connection to the RV industry is reflected in
Congress. The U.S. Senate’s bipartisan “RV Caucus” - whose
purpose is to promote the industry within Congress - is co-chaired by
Indiana Senator Joe Donnelly with that state’s other senator, Todd
Young, also being a member. On the House side, Indiana U.S.
Representative Jackie Walorski is co-chair of its “RV Caucus”
with four other Indiana House members also serving on the body.
“Right
now, manufacturers are concerned that the tariffs could hurt the RV
market by increasing their costs and forcing them to raise prices. RV
makers are trying to hold the line on price for now, but that becomes
more difficult the longer the tariffs remain in place,” Kevin
Broom, spokesman for the Recreational Vehicle Manufacturers
Association, said to this reporter.
The
short explanation is that tariffs
on steel and aluminum
negatively impacts
RV production in the U.S. in several ways.
Among them are increasing production costs both for RV manufacturers
as well as their
suppliers, the
Association adds.
Yet
even before the tariffs were implemented, domestic steel and aluminum
producers were increasing their prices to downstream RV industry
users, by amounts between 10 and 30 percent, Broom said as well.
Expanding
on the subject, the RVMA added that
“the scope of the steel and aluminum tariffs that
have been enacted is far too broad to have the intended effect of
curbing abuses by certain countries, and will only create new
challenges for American businesses to the benefit of foreign
competitors.”
And
as if the additional cost of raw metals was not enough, prices to the
consumer on RV models at retail in March were “up 8.5 percent
versus the same time last year” Broom says.
Not
surprisingly therefore the RVIA “opposes
increased steel and aluminum tariffs which increase the cost to
manufacture RVs and their components.”
As
for what appears not to be impacted - at least for now, anyway - is
the cost of imported outboard engines unless they are assembled as
part of a packaged item. In which case the additional expense is the
result of the tariffs on imported metals.
Spokesmen
for both Honda Marine and Yamaha Marine told this reporter at the time this story was written that they are unaware of any
additional levy or tariff on their respective outboard engines.
Similarly,
a spokesman for the National Shooting Sports Foundation said his
organization's members are not experiencing any new tariff or duties
being applied to handguns, rifles and shotguns being imported into
the United States.
- By Jeffrey L. Frischkorn
JFrischk@Ameritech.net
