Job losses on the horizon for US boat industry, insider warns

Bill Yeargin, the chief executive of Orlando, Florida-based Correct Craft, has escalated the warning he issued in August last year to say the industry is on the cusp of widespread job losses more than a year after US President Donald Trump launched a US-centric trade war.

“Everyone agreed that the ongoing trade war is having a negative effect on the uniquely American recreational boating industry,” Yeargin told the US National Marine Manufacturers Association after attending a series of high-level meetings at last week’s Miami International Boat Show.

“Along with raw materials and components becoming more expensive and difficult to procure, sales to our largest international buyers are down,” Yeargin said.

“Put simply, the American boat manufacturing industry is seeing costs increase while sales to international customers decline.

“That means fewer boats, engines, fish finders, and thousands of additional marine accessories are not being sold, which will eventually impact American jobs.”

Yeargin said that the trade war – which has drawn retaliatory trade sanctions from economies including Mexico, China and the European Union – was high on the agenda at top-level meetings organised around the Miami show.

"While most agree there are trade inequities that need to be fixed, pretty much everyone [in the US boat-building industry] also agrees we are currently in an unendurable position,” he said.

Yeargin said the US marine industry was still waiting to feel the full impact of the trade wars.

“While the strong domestic market is currently mitigating losses from dwindling international sales, there’s no indication this will last forever, and regardless of the U.S. demand, U.S. manufactures want to support and protect their investment in global distribution which creates American jobs,” he said.

“And every day this continues, the more likely we are to cede global market share to non-American manufacturers which will eventually cost American jobs.”

One area that could quickly help the US boat industry was the US-Mexico-Canada Agreement (USMCA), which Trump has signed, but the document is still to be ratified by Congress.

“Unfortunately, the USMCA does not deal with the thorniest issue for the boating industry; the Section 232 national defense tariffs applying to steel and aluminum, which was signed by President Trump and resulted in retaliatory tariffs on US products that included a 10 per cent tariff on boats,” Yeargin said.

“With ratification of USMCA on the horizon, there’s an opportunity to address some of our trade imbalances with the added bonuses of restoring normal market prices for aluminum and steel and removing retaliatory tariffs on quintessential American industries, like boat building.

“Though these items are not included in USMCA, many in Congress have indicated that they will review the trilateral agreement in light of these additional tariffs that are hurting US businesses,” he said.

“This will create a tremendous amount of visibility of the 232 tariffs that are hurting our industry and give us a chance to demonstrate the unintended consequences of the trade war on our industry and employees.”

The NMMA said last week that powerboat registrations in the US were up 4.2 per cent in 2018.

Registrations of new outboard-engined boats, which made up 64 per cent of the recreational vessels sold in the US in 2018, were up 3.0 per cent compared with 2017.