>> Can­celled boat or­ders

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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.

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