The European sector has been described as “basically unmarketable” for U.S. shipbuilders following a 25% duty hike in certain American imports by the E.U.
The rise in duty on “sea-going boats and yachts, with or without auxiliary motor, for pleasure or sports,” imported from the U.S. is a direct response to the Republican administration’s bullish approach to trade with key allies – chiefly the recently imposed tariffs on steel and aluminium entering the U.S.
Nicole Vasilaros, senior VP of government relations and legal affairs at the National Marine Manufacturers Association (NMMA), told Boat International that the “significant” increase in duty has led to Europe being “basically unmarketable”.
“It’s impossible to absorb that cost – there are other boatbuilders that can fill up that gap and we’ve heard from manufacturers that they’re having orders cancelled,” Vasilaros revealed. “For many US builders between 10% and 30% of their business is exports. This is definitely causing an impact.”
Although many firms have so far avoided cancellations, those affected may be forced to cut jobs. Vasilaros noted, “You can’t go on having orders cancelled and not sustain a hit in your workforce.”
Boat International also report that Jim Gilbert, president of U.S. builders Christensen, recognised the “enormous” new fees on American imports. He said that the yard had not yet been affected by cancelled orders, but that it could feel “market deterioration” if the conditions continue or worsen.
“I think many buyers who are thinking over the two to three-year term of construction would assume, as I am assuming right now, that this is a lot of strutting and chest-puffing and ultimately will not take place,” Gilbert said. “There is simply too much for the U.S. to lose in any trade war, especially with important, friendly European nations.”
Vasilaros reportedly echoed these sentiments, wishing for a “quick resolution”.
In a proactive move, the NMMA has joined forces with the International Council of Marine Industry Association and the European Boating Industry to call on U.S. president Donald Trump to end provocative and escalatory trade measures.
In the letter, addressed personally to Trump, all three organisations plead with the commander-in-chief to de-escalate the situation. The dispute, the letter claimed, has “effectively frozen the export market” and directly resulted in “marine dealers in the E.U. and Canada [cancelling] orders of U.S.-built boats”.
The letter also stated, “Without a solution that immediately withdraws these tariffs or exempts key allies, the marine industry – and the global economy – will suffer.”