Markets & Regions
ibinews.com International Boat Industry | JUNE–JULY 2019 27
BOATBUILDERS | USA
Navigating
the turbulence
WHILE US BOATBUILDERS ARE GENERALLY ENJOYING GOOD TIMES,
THREATS TO THE BOTTOM LINE FROM LABOUR SHORTAGES AND TARIFFS
DARKEN AN OTHERWISE BRIGHT PICTUREWORDS: CRAIG RITCHIEW
hile the US boat industry may be
basking under a sunny glow at the
moment, it is not sailing under an
entirely cloudless sky. In an industry with a long
history of economic ups and downs, prudent
boatbuilders are keeping a very close watch on a
turbulent international trade landscape that seems
to change on a continuous basis.
By far, the largest and most directly threatening
clouds on the horizon exist in the form of ongoing
trade wars with China, Mexico and the EU.
THE CHINA SYNDROME
An escalation of President Donald Trump’s Section
301 tariffs on goods imported from China on May 10
- increasing tariffs on more than US$200bn worth of
products from 10% to 25% – represents an immediate
and substantial cost hike to a wide range of supply
chain goods for US boatbuilders. To put the damage
in perspective, Brunswick Corporation CEO David
Foulkes informed investors that the increase
represents a direct US$7m hit to his company’s
bottom line – in spite of Brunswick having already
received tariff exemptions on Mercury outboard
motors imported from its Suzhou, China plant.
Worse still, President Trump has threatened to
extend that 25% duty to the remaining US$325bn
worth of presently-exempt goods imported from
China if he doesn’t see greater progress in ongoing
trade negotiations between the world’s two largest
economies. Exactly if or when that may happen is
unclear, but the president’s penchant for sudden
announcements means additional tariffs could be
imposed without warning at any time.
“Those Section 301 tariffs are a real concern
because, obviously, a lot of boat parts and
hardware come through that avenue. Across the
industry, everybody has concerns about it,” says
Bob vanVollenhoven, vice president of sales and
marketing at Hartsville, South Carolina-based
Stingray Boats. “No question, that is going to
impact the cost of going boating.” Stingray 208 CRComplete Climate Solutions: Heating, Cooling & Roofs