US boat exports fall to ‘catastrophic’ lows in trade war, maker warns

US boat makers are struggling with a 25 per cent tariff slapped on boats made in the US earlier this year, and a 10 per cent tax on boats shipped from the US to Canada – a direct response to the Trump administration’s strong protectionist line on US jobs that has also angered foreign car makers with production lines in North America.

“We’ve had a lot of order cancellations,” Rob Parmentier, the chief executive of Wisconsin-based Marquis-Larson Boat Group

“It’s been catastrophic.”

Adding to the pain, USA Today said, were increasing costs for the raw materials used in the boat-building process.

The revelation comes as Australian boat-builders rally to stuff their books with orders from US and European customers keen to take advantage of a lower Australian dollar and a rush of new, sharply styled products.

A 2013 US Commercial Service report showed US exports of recreational watercraft and accessories was worth $US2.1 billion to the economy, with US-sourced products accounting for about 75 per cent of the boats sold worldwide – with Australia named in the report as one of the top markets.

A US Government trade report released in 2016 showed Australia was the fourth-largest recreational marine product export market for US boat-builders behind Canada, Mexico and European Union member country Belgium – all of which have objected strongly to the US Government’s hardline approach to tariffs.

The US-based National Marine Manufacturers Association (NMMA), which advocates for the US boat-building industry, said earlier this month that tariffs on the recreational boat industry “continue to take their toll” almost a year after they were introduced.

It said a last-minute deal struck to set new framework for the North American Free Trade Agreement (NAFTA) late last month failed to take into account the “retalialiation from Canada and Mexico targeting US boat imports”.

“As a result, millions of dollars of orders have been cancelled, causing severe economic hardship and the threat of job losses in the industry,” the NMMA said.

Also troubling the US industry are ongoing tensions with China, which the NMMA noted “do not appear to be de-escalating anytime soon”. Part of that dispute includes allegations that China has been dumping aluminium sheet in the US, with a “tit-for-tariff” 130 per cent duty imposed on the boat-building material by the US Government “causing domestic prices to skyrocket upwards of 40 per cent”.