>> Cancelled boat orders
The reports of cancelled orders came in immediately after the EU, Canada and Mexico announced their retaliatory tariffs on U.S. boat exports, and already it totals millions of dollars in lost sales. Particularly hardhit are the builders of large boats, where only a few units are sold each year world-wide. The loss of just one or two sales can have a devastating impact on a company that may build as few as five or ten large boats a year. One company is projecting a sales loss on the order of 20%.
The European Union recently imposed a 25% tariff on most types of boats made in America, effective immediately. Canada announced a 10% tax on all U.S.-made boats effective July 1, and Mexico announced the immediate imposition of a 15% tariff on all U.S.-made boats.
The U.S. boat builders comprise what is little more than a cottage industry. Relatively small factories dotted around the U.S., most east of the Mississippi River and typically employ anywhere from 50 to 1,000 employees. Unit sales for every type of boat, except for PWCs and aluminium fishing boats, is small, virtually all under 3,000 units a year. Large boats, those of 40’, typically have sales of fewer than 100 units a year by brand and many famous brands actually build fewer than 20 units a year. So, if the boating industry is so small, why has the EU chosen to drive a stake through their European sales? The U.S. boating industry has “become a target for those that are wishing to make a point to this president. It’s a real U.S. manufacturing industry. In an era where not a lot is still made here in the U.S., boats are.”
Dealers in Ontario have already cancelled 500 orders from the U.S. builders they represent. “This is absolutely not a situation that has anything to do with economics,” said Rick Layzell, CEO of Boating Ontario Association. “Boat sales have been brisk this year and inventory pipelines are very low. The tariffs are adding a ten percent increase, and with the rising prices from aluminium boat builders and sales taxes, consumers could see a 25% price increase overnight. Most are willing to let the deal die rather than pay that.”
Clearly, American jobs will be lost as a direct result of these tariffs; the only question is how many.