Nicole Vasilaros, senior vice president for government and legal affairs at the National Marine Manufacturers Association, says there is no question that the European Union tariff of 25 percent on American-built boats has hurt the U.S. marine industry for the nearly three years that the tax has been in place.

“We’ve seen a 40 percent decrease in exports,” she says. “The cost to the industry we estimate at more than $400 million in lost sales. And the impact is obviously with U.S. manufacturers that are exporting their product, but the side effects are also felt by our European counterparts, dealers and distributors who don’t have American brands to sell. And ultimately, the customer suffers.”

On June 1, that 25 percent tariff is scheduled to increase to 50 percent, setting up a situation that Vasilaros says will only get worse. “To go ahead and double the tariff, we expect that would almost entirely close out the European market to American boatbuilders,” Vasilaros says. “And while obviously domestic sales are very strong and there’s an inventory backlog, the export market is a really key element to many manufacturers’ overall business portfolios. We don’t want to lose that.”

The tariff no longer extends to U.S. boat exports in Mexico and Canada; those were lifted in 2019. Now, with a new administration in Washington, D.C. — and a new way of negotiating — is it likely the retaliatory tariff will be lifted before it increases? “We are hopeful that the Biden administration is going to take a strong look at this,” she says. “They want to rebuild those connections with our allies, and the European Union is a strong and important trading partner.”

SAILFISH BOATS

Sailfish Boats president and CEO Rob Parmentier says the demand for U.S.-built boats was significant before the 25 percent tariff went into effect.

“One of the strong suits in my business life is distribution, and I keep in contact on European distribution,” he says. “They want our boats. [But] no one’s going to pay 25 percent more — or, for that matter, 50 percent more come June 1. I definitely keep in contact with [European dealers], but it’s a dead end unless that tariff gets removed.”

Vasilaros says the NMMA is hopeful that there will be an agreement, whether it looks like a quota or an elimination of all tariffs. “At the very least, I would hope that as we have these discussions and we try to rebuild those connections, it doesn’t escalate,” she says. “We want free and fair trade. European imports don’t face that tariff, and we don’t think it’s fair that American brands would face it going into the E.U. market.”

The NMMA’s efforts have included interviews on BBC News, traveling to Belgium to speak with European officials, and having CEOs appear live on Fox News or write letters to the editor and opinion pieces for print and digital media. The NMMA’s team has also taken senior-level meetings with the White House, the U.S. Department of Commerce secretary and trade ambassadors.

“We’ve tried it all,” Vasilaros says. “We’ll continue to work through those channels and put on pressure. June 1 is not far away.” 

This article was originally published in the May 2021 issue.