European tariffs on U.S. Boats

True and to the boat industry this isn't as devastating at 2008 and the recession. However, uncertainty is not knowing how strong the market it going to be. Calling the sudden loss of 20% of your business due to government actions, "uncertainty", is like calling Hurricane Maria in Puerto Rico a "rain shower. "

The topic is the US boat industry and it's once again in serious danger, some manufacturers more than others. As always, most will survive but some won't or will only in a much lessened version of themselves.

Our political elites gave China and others "Favored Nation" status years ago along with many one way trade deals and look how that has turned out. Reciprocal trade tariffs on EU mfg boats sounds fair to me.

May sound fair if you don't mind putting all the US dealers of those boats out of business. This is the current fear in Canada with only the 10% tariff, that the dealers are in big trouble. You effectively shut down import of European boats and Fort Lauderdale is damaged severely.

It's all too easy to think business and think numbers and think fair and lose sight of the real people hurt in the process. There have already been some builds put on hold and some employees given a long mostly unpaid July 4 vacation while legal matters are sorted through. This is at a small custom builder who for obvious reasons doesn't want it public while they frantically search for a US buyer for their 60% completed boat.

This may be a game to some but it's life altering to others.

There is a UK steel foundry that is the only place that manufactures a very specialized armour used in defence. Their biggest customer? The US Army.

Go figure!!

Similarly there isn't enough aluminum capacity in the US of the type used for boats to even attempt to build all the aluminum boats.

BTW, just found out the aviation world is going through the same trade war. There is turmoil in Savannah where Gulfstreams are made. 60 million dollar jets with a 25% (I think) tariff if sold to European customers. I just hope Trump is bluffing, trying to lower barriers everywhere, but fear he really believes in protectionism.

Interesting aside: are you aware that many free market economists say the trade deficit doesn’t need to be measured, that it is meaningless? I seem to remember Milton Friedman saying that. I tend to agree with him.

You're awful callous. I think of the people losing jobs through no fault of their own, the persons losing on investments through no fault of their own.

Your Indian comment makes no sense. Indian went out of business in 1953. Then a new owner rebadged British motorcycles. That was followed by Italian production. Then another bankruptcy. After that 20 years of quiet followed by a battle, another bankruptcy and securities fraud, tax evasion and money laundering by owners. Next the Gilroy Indian and another bankruptcy. And what you see now isn't the Indian of history but a Polaris Indian and low volume.

Never complaining or asking for anything? The long string of bankruptcies asking not to pay their debts?

Go tell the hard workers building Harley Davidsons to let them move, no loss.

While you're at it, I have a couple of small custom boat builders who are stuck right now that you can go tell to. I just don't get the politicizing and lack of human compassion for those hurt. I don't care the reason, every time I see persons lose jobs through no fault of themselves, I feel bad for them.

ob, my comment was based on free trade without all the protectionism and tariffs. I have no interest in anyone being put out of business because of tariffs, but if the EU is putting tariffs on our boat imports we should reciprocate with equal tariffs.

I think most of us think free trade is reciprocal on tariffs across the board with no government subsidies. Makes everyone compete on a level playing field and there always will be winners and losers. We usually end up on the short end of the stick in these badly structured trade deals.

It concerns me that these current trade issues are happening and will affect all of us in some way, but it has to be fixed.

Pascal, we quit making lead here too!

Here's the best information I have on some select builders.

The two small custom builders. One of them rarely sells to Europe but currently has a boat for a European buyer 3/4 complete. The other hasn't sold many boats yet but 50% are to Europe. Probably long term would be 20%.

Now a large builder is currently sitting on 20% of his boats in progress as boats sold to European buyers.

Then there's the large production builders. One is less than 10% Europe and the other between 15 and 20%. The second has a very strong established network of dealers in Europe. They also have a boat load of boats on the water that the dealer group is saying they will not accept and that's a real dilemma. They're negotiating. Problem is does the dealer even want them now if the builder pays the duty feeling they can't afford future boats and can't continue to carry the line?

I really don't think a 10% additional for a new yacht is going to be that much of a deterrent. The exchange rate between here and Europe can change 10% in a few weeks time......and often......in the end it will work itself out. If someone was looking to save money, they'd be buying a used boat in the first place.

But we're talking 25% on sales to Europe, not 10%. 10% is Canada. And last time there was a 10% increase in the US, the luxury tax attempt, things screeched to a halt before it was reversed.

If EU buyers can find similar boats without the 25% tariff, then they'll do so.

Well, perhaps they'll find a lot more Euro boats to buy that aren't being shipped to the US and US buyers will be buying a lot more US boats that aren't being shipped to Europe...…