New tariffs, trade disputes could increase boat prices
Thousands of Wisconsin jobs may now be at risk
As thousands of Americans shop for a new boat this year, tariffs on foreign metal could drive up prices and put a dent in their dream of spending time on the water.
U.S. boat manufacturers are facing a tariff of about 60% on one type of aluminum imported from China, in addition to the 10% tariff that President Donald Trump authorized last week on aluminum imported from most countries.
Also, the European Union has threatened to impose a tariff on U.S. powerboats, in addition to Harley-Davidson motorcycles, Levi’s jeans, cranberries and some other American products.
With more than 40% of new powerboats sold last year being made from aluminum, and billions of dollars in sales, the tariffs could harm the U.S. boating industry and put thousands of jobs in jeopardy, said Thom Dammrich, president of the National Marine Manufacturers Association.
Fishing boats, trailers, pontoon boats and docks are made from aluminum and steel.
Year after year, Wisconsin ranks in the top 10 states in sales of new powerboats, engines and accessories.
Wisconsin also is home to Mercury Marine and Evinrude, two of the largest manufacturers of outboard engines.
If rising aluminum and steel prices harm powerboat sales, by pricing some consumers out of the market, it’s going to send a wave across the boating industry, according to Dammrich.
“If you don’t sell as many boats, then you don’t sell as many engines, electronics and everything else,” he said.
It’s too early to say how much the tariffs will add to the price of a boat, but raw material costs “are significant” for manufacturers, according to Dammrich.
“Most of our manufacturers will continue to use domestic aluminum and steel,” he said, but those costs are rising in anticipation of less foreign metal coming into the United States.
“Tariffs give domestic producers license to raise their prices,” Dammrich said.
The 60% tariff on what’s called “aluminum
Twin Mercury 350 supercharged Verado outboards are mounted on a Crest Continental 270 NX-SLS Twin pontoon boat on display from Tinus Marine in Oconomowoc. Equipped with many luxury and technology features, it sells for $142,479. Proposed tariffs on steel and aluminum could boost boat prices.
sheet” from China could come as early as April from an unprecedented move by the U.S. Commerce Department, according to Dammrich.
“This is a high-speed train rolling down the track,” he told Trade Only Today, a boating industry website. “We’re going to try and make the best of it, but there’s going to be tariffs announced in April. … Our goal is to make those as reasonable as possible.”
Docks and marina expansions are going to be more costly, said Eric Kretsch, legislative coordinator for the Association of Marine Industries.
“And at some point it’s passed on to the consumer, whether the consumer is the marina operator buying a dock or a person buying a boat. The costs will go downstream,” Kretsch said.
Many U.S. marinas were nearly sunk by the Great Recession, but the industry has since rebounded with boat-slip occupancy rates at some of the highest levels in years. Marinas are looking to expand and add amenities in a growing market, but rising material costs could scuttle some projects.
“I think the (boating) industry will definitely see an impact. I can’t imagine how it wouldn’t,” said Michelle Shrider, chairwoman of the Wisconsin Marine Association and general manager of Washburn Marina in Washburn.
The U.S. recreational marine industry supports 650,000 jobs and last year had $37 billion in sales.
Renewed consumer confidence and lower fuel prices have helped the industry get off to a healthy start this year, following a strong 2017.
Tariffs and trade wars could kill the growth, according to Dammrich.
“It’s our hope that the Trump administration will look to our history as a guide, and remember that protectionist trade policies and trade wars have not, and will not, produce positive outcomes for workers, businesses or consumers,” he said.