Yesterday’s announcement that retaliatory tariffs by the European Union on U.S.-built boats might be eliminated was a hopeful sign to boatbuilders that export to Europe.
President Donald Trump and European Commission President Jean-Claude Juncker said they would delay new duties on such products as European automobiles while beginning discussions to eliminate current tariffs. They also vowed to resolve the steel and aluminum tariffs that the Trump administration imposed on the E.U. earlier this year. Trump said during a press conference yesterday that the two sides would begin a “dialogue to reduce differences on regulatory standards between the two economies.”
NMMA president Thom Dammrich told Trade Only Today that the looming trade war has not been good for the U.S. economy or the boating industry. “If the agreement announced yesterday leads to a quick end to retaliatory tariffs from the E.U., this will be a very positive development and will limit the damage,” Dammrich said.
There was no schedule announced to complete the talks.
“I am cautiously optimistic,” Correct Craft CEO Bill Yeargin told Trade Only Today. “It seems like all the outcry regarding how the tariffs will impact American businesses is having an impact.”
Yeargin added that he is “pleased” the administration is listening. “We still have a ways to go, but hopefully this creates positive momentum to also resolve issues with Canada and Mexico.”
Peter Truslow, president of Bertram Yachts, has been contacting his senators and congressional representatives regarding the impact that the 25 percent E.U. tariffs have had on his business. Truslow said the export of two 61-footers, valued at $8 million, hangs in the balance because of the tariffs.
“This had an immediate effect on my business,” Truslow said. “We fully expected to get the orders on these boats, but both European buyers said they won’t buy with a 25 percent tariff in place. That business was very important to our small company.”
Truslow believes the government has “gone off the rails” when it comes to tariffs and trade policy. “They meet with the Europeans yesterday and agree to work toward a reduction in tariffs, and in exchange, Trump handed back his biggest weapon — the threat of tariffs on European cars,” Truslow said. “In the end, this was a totally unnecessary crisis that will get boatbuilders nothing. The best we can hope for is a return to the status quo, and that’s a situation that wasn’t that fair to begin with.”
A strong U.S. dollar, high labor costs and E.U. regulations that American builders must meet combined to put U.S. boat exporters at a disadvantage, compared to European builders importing into the United States, Truslow said.
“If you single out boats with a special tax, it stops sales,” he said. “We saw that with the luxury tax.”
With the $8 million in sales hanging in the balance, the tariffs have also forced Bertram to move carefully with future plans, including hiring workers for new projects. “The yacht buyers can afford to wait or buy another brand in Europe,” Truslow said. “But the people who really get damaged are the hard-working Americans who build these boats.”
If the agreement announced yesterday between Trump and Juncker to reduce or eliminate tariffs between the United States and the European Union leads to a quick end to retaliatory tariffs from the E.U., this will be a very positive development and will limit the damage.
