Export consultant Julie Balzano has spent more than two decades helping marine manufacturers grow globally and has plenty of experience guiding clients through tariff challenges.
But the current trade landscape has “taken the uncertainty to a whole new level,” Balzano told Trade Only Today. “The rules keep shifting, and when that kind of unpredictability drags on, companies start pulling back. Budgets get tighter, and the first things to go are often marketing efforts and trade and/or boat show appearances. It’s understandable but cutting global visibility like that makes it even harder to stay competitive in the long run.”
The cloudy trade conditions Balzano talks about have grown only marginally clearer this week. Canada said Sunday that it would rescind its new digital services tax on U.S. technology companies, which had caused President Donald Trump to pull out of negotiations on a new trade agreement with our northern neighbor late last week. Talks between the two countries are resuming.
And Bloomberg reported earlier this week that the European Union, which is up against a Trump-set deadline of July 9 to negotiate a new trade agreement with the United States, is willing to accept a 10% universal tariff on many exports but wants the U.S. to set rates lower than that on key sectors, such as pharmaceuticals and commercial aircraft. It’s unclear whether Trump and his negotiating team would consider such an arrangement.
It was on April 8 that Trump announced what he called “reciprocal tariffs,” then suspended them to allow for 90 days of negotiations. The tariffs have been challenged in the United States and are part of a significant court case.
Additional tariffs still under consideration include levies on certain sectors that the Trump administration views as critical to national security and would be issued under Section 232 of the Trade Expansion Act of 1962.
“All of my clients want to keep growing — or at the very least, hang on to the international sales they’ve worked so hard to build,” said Balzano, the founder and principal consultant at Florida-registered Global Connect Marketing Services. “But the constant uncertainty makes it tough to price, to source consistently or to commit to long-term plans. For small businesses, that kind of instability isn’t just frustrating — it’s exhausting and costly.”
Balzano said two of her accessory manufacturing clients recently told her that they stopped promoting “Made in the U.S.A.” during a European sales trip because the label was working against them.
“The feedback they got was surprisingly negative,” she said. “Kind of ironic, considering the whole point of the trade war is to boost American manufacturing. But just the threat of tariffs can be enough to derail a deal. Buyers want stability, and if they’re not getting it from the U.S., they’ll look elsewhere.”
Trade expert Tamara Kay told Trade Only Today that Canada’s decision on the digital services tax is a hopeful development.
“Canada has to reach some kind of agreement with the U.S. because their economy depends on it,” said Kay, Andrew W. Mellon professor in the sociology department at the University of Pittsburgh and co-editor of the interdisciplinary journal Studies in Comparative International Development, which focuses on political, social, economic and environmental change.
“There is talk in Canada of increasing trade within Canada, but that will not make up for losing U.S. markets and will be difficult to achieve, given regulations and politics between Canadian provinces,” Kay added. “Trump has wielded a power that presidents before him also had but were reluctant to use, in part because they recognized that trade is not only about economics [but] also about politics. In the case of Canada, the U.S.’s closest neighbor and ally, throwing their economy into chaos is not a good political move.”
Balzano said she also recognizes the importance of Canada’s decision to withdraw the digital services tax.
“Canada really matters when we’re talking about U.S. boat and engine exports — it’s by far our biggest export market,” she said. “Roughly half of all the boats we export go to Canada.
“Canada targeting U.S. digital services was a clever move — it hit a nerve,” she added. “Tech is one of our biggest economic drivers, and Trump’s had long-standing friction with the industry, so it struck both politically and economically. Now that Canada is willing to pause that tax, it clearly shows they’re serious about reaching a broader agreement.”
But would the EU’s willingness to agree to 10% tariffs be something that is acceptable to the U.S. boating industry?
“It depends,” Balzano said. “A flat 10% duty still stings, just in a different place. Instead of hammering our exports, it could make EU-sourced equipment and components more expensive at home, squeezing margins for U.S. boatbuilders who rely on Italian hardware or German electronics, as examples.
“Also, for U.S. boatbuilders, a 10% blanket tariff looks mild only against the bruising 25% duty we endured from 2018 to 2021, which slashed U.S. boat exports to the EU by over 40%,” she said. “That retaliatory tariff was just lifted a short three and a half years ago. But still, even at ‘just’ 10%, most manufacturers would call it a ‘discount-killer,’ as margins for boat exports are already thin.
“For some marine component or accessory manufacturers, however, they are currently paying tariffs above 10% when entering the EU So if a universal 10% replaces those, it could be considered beneficial for some with a slight margin improvement.”
Kay said the EU is likely to accept a trade arrangement with the United States in the short term to be fleshed out in the longer term that includes a universal tariff, with exemptions in critical sectors, such as aerospace and pharmaceuticals.
“The EU stands to win from higher U.S. tariffs on China because it can replace some of the U.S. imports that usually come from China with European exports and also import more goods from China,” Kay said. “Of course, this will also have political implications, as global trade relations impact geopolitics.”
