Trade Wars Continue

Boaters can expect to see conflict continue into 2019

December 2018 News Lane Miles Web Exclusive

The National Marine Manufacturers Association (NMMA) recently released a press release that announced that as 2018 comes to a close the trade war can be expected to continue impacting the boating industry in 2019 -- news that no boat manufacturer or recreational boater wants to hear.

Though some progress has been made in the trade war, there are simply too many challenges left ahead to expect that this won’t be something that impacts boaters in 2019. The United States-Mexico-Canada Agreement (USMCA) was a welcomed advance in this battle, but some of the biggest issues like eliminating retaliatory tariffs on U.S. boats still remain.

“While the official signing of USMCA is encouraging, the challenges created by the aluminum and steel tariffs and subsequent retaliation far outweigh our enthusiasm,” stated NMMA president, Thom Dammrich, and NMMA Canada president, Sara Anghel. “Negotiators should capitalize on the goodwill created by this agreement and immediately remove Section 232 tariffs and retaliatory measures – thousands of businesses and jobs in Canada, Mexico, and the U.S. are counting on it.”

Canadian and Mexican retaliatory tariffs – coupled with those levied by the European Union – have all but dried up U.S. boat exports to markets that account for nearly 70 percent of the U.S. industry’s international sales.

In a positive development, U.S. President Trump and Chinese President Xi announced a temporary ceasefire in the trade war on December 1, with the goal of striking a negotiated agreement by March 1, 2019. As part of the deal, President Trump agreed not to increase Section 301 tariffs on $200 billion worth of Chinese goods (List 3) from 10 to 25 percent on January 1, 2019.

The conflict between China and the U.S. has hit the industry particularly hard, with more than 350 commonly used marine products and boats being targeted.  

Perhaps the most concerning news came last Friday when the U.S. International Trade Commission (ITC) issued its final decision in the antidumping and countervailing duty investigations into common alloy aluminum sheet from China, which affirmed the Trump administration’s 96.3 percent to 176.2 percent duties on the material. Because of these investigations, boat builders are seeing a 30 to 40 percent price increase for aluminum sheet.

“The ITC’s decision is troubling news for marine manufacturers and the people they employ. Aluminum boats represent 44 percent of new boats sold each year and account for approximately 22,000 American jobs,” Dammrich stated.

The ITC also issued a negative critical circumstances decision. As a result, imports of aluminum sheet from China will not be subject to retroactive antidumping or countervailing duties – meaning importers with entries during the 90-day retroactive periods from exporters subject to critical circumstances will have their liability for any duties during those time periods released. This will not happen, however, until the U.S. Department of Commerce instructs Customs and Border Patrol to release the funds.

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