Correct Craft CEO Bill Yeargin: We’re on the front line of trade war
A trade war is breaking out between the U.S. and our trading partners around the globe. While many people have not thought about this war beyond headline skimming, the U.S. administration’s trade policies have many in the business community concerned. The president and economic nationalists see these actions as essential to protecting U.S. interests and jobs, but many manufacturers and businesses see this trade war negatively impacting our economy, jobs, and consumers.
And, as in any war, it is scary on the front lines.
Our company, Correct Craft, manufactures uniquely American-made products (boats and engines) that are built in six factories across the U.S. and distributed into about 70 countries worldwide. Our team of nearly 1,300 workers is proud that we build products in the U.S. that are desired around the world. While we import some materials for our boats, our company is a significant net exporter. Our companies, and our broad team of employees and vendors, use the resources we receive from selling boats around the world to support our families, as well as contribute services to our communities, including lake clean-ups, supporting an orphanage, helping sick kids and building homes with Habitat for Humanity.
When the U.S. initiates tariffs on imports, it increases the cost of products companies acquire through our global supply chains, which effectively places a tax on our companies and customers. Tariffs raise costs and few businesses can simply absorb these costs; we have no choice but to pass them on to the consumer.
Then, the customer in Florida, Texas, Indiana or anywhere else in the U.S. goes into a boat dealership (staffed by U.S. workers) and learns the price of their dream boat has increased.
The boating consumer is particularly sensitive to price increases. If that customer decides not to buy because the product is now more expensive, or just out of frustration from the higher price, that will put jobs at U.S. factories and dealerships at risk.
The other significant impact of increasing U.S. tariffs is that our trade partners inevitably retaliate with their own tariffs on our exported products. Our company sells a tremendous amount of product outside the U.S. and about 70 percent of that international product is sold into Canada, Mexico and Europe. As of this writing, all three of these markets have announced significant retaliatory tariffs against the U.S.
This retaliation from our trading partners will impact businesses like ours, who are selling consumer products globally, by making our products more expensive (10 percent in Canada, 15 percent in Mexico, and 25 percent in the EU.) In other words, it’s going to make it more difficult to sell boats around the world — and this puts the jobs of U.S. employees in jeopardy.
Global trade is complex and posturing can sometimes lead to a better result. But on the front lines, businesses are seeing costs increase, which makes our products more expensive, at the same time we are seeing markets close. The situation is made worse by the uncertainty suppliers, manufacturers, distributors and customers feel, which tends to further freeze markets.
Our company, and many other companies, will do all we can to mitigate the damages, but also encourage our leaders to resolve this situation quickly.
The administration has done a masterful job of concentrating the world’s attention on free and fair trade. We now need to use this new focus to “close the deal” and avoid a trade war that could be devastating to many U.S. businesses, jobs, and families.