28 JUNE–JULY 2019 | International Boat Industry ibinews.com
Markets & Regions
BOATBUILDERS | USA
A DIFFERENT KIND OF WALL
With little hope in sight for a quick end to the
escalating trade war with China, some US-based
manufacturers have indicated a willingness to
shift offshore production from China to Mexico.
But that line of thought took a hit on May 31 when
President Trump announced plans to impose a new
escalating tariff on all goods imported from Mexico
effective June 10.
In a subsequent, official presidential statement,
Trump noted that the new tariff would begin at
5% and increase to 10% by July 1, with further 5%
increases at the beginning of each month through
October if his concerns over illegal immigration
along the US-Mexico border are not satisfied.
“Tariffs will permanently remain at the 25% level
unless and until Mexico substantially stops the
illegal inflow of aliens coming through its territory,”
said the statement.
Though the tariff never materialised, with
Trump calling off the threat on June 7, a 25% levyOne bright light in the saltwater fishing sector has been
the heavy-gauge aluminium market, where builders in the
Pacific Northwest can barely keep up with ordersSAY “SALTWATER FISHING boat” and most people
working in the North American boat industry will immediately
picture a large fibreglass centre console, its transom bristling
with multiple huge outboards and its pastel gelcoat gleaming
under a blazing Florida sun. Yet one of the hottest and fastest-
growing boat markets in North America is the saltwater fishing
category in the Pacific Northwest, where heavy-gauge, welded
aluminium boats dominate the market.FLYING UNDER THE RADAR
on goods imported from Mexico would have had
lasting effects on marine industry manufacturers
with operations in Mexico, including BRP, which
has produced its Sea-Doo watercraft at a facility
in Querétaro since 2013, and Brunswick, which
operates a Mercury parts plant in Juarez and a boat
plant in Reynosa that builds fibreglass product for its
Bayliner, Sea Ray, HeyDay and Lund brands.
Ironically, President Trump’s threat of new
tariffs on Mexican goods came on the very
same day that his administration moved to gain
congressional approval of the United States-Mexico-
Canada Agreement (USMCA) free trade pact. So
far, ratification of the agreement remains on the
legislative agenda for all three countries. Whether
the unpredictable US President might launch
new tariff threats before the USMCA deal is fully
ratified is anyone’s guess. Trump has stated that
unpredictability helps him negotiate, and he
has shown no hesitation in the past to rip up
existing agreements.Although the saltwater category overall started the year
on a soft note, manufacturers in the Pacific Northwest find
themselves unable to build boats fast enough to keep up with
mounting dealer orders. Byron Bolton, president of KingFisher
Boats in Vernon, British Columbia, says the demand for these
tough craft has been fueled more recently by their success
in attracting buyers in new markets far away from the coast.
“Over the last number of years we have seen consistent
growth in the heavy gauge market,” he says. “Increasingly,
we’re seeing growth in North America’s Great Lakes region
and the central part of the continent.”
That growing order book has driven the company to
recently expand its manufacturing space in order to increase
production volumes and accommodate larger product,
including its new 3425 GFX flagship. “With the continued
demand for heavy-gauge boats we've found it necessary to
expand, with a very significant investment in building facilities
and hiring a number of new employees,” says Bolton. “To
scale it, this recent expansion will give us an approximately
30% increase in capacity, which at this moment, we continue
to be overselling. Our demand is greater that our capacity.”
Under the circumstances, one might expect the company
to be happy selling every boat it can produce. But not so, as
Bolton is clearly focused on future market expansion. “The
North American market we play in is very large, and there are
many untapped opportunities here,” he says. “Having said
that, we also export to northern Europe where the features of
the product, from its rugged design to its low maintenance
requirements, are highly valued.” Kingfisher's new
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