The latest set of US trade measures are due to come into effect tomorrow (5 April), beginning with a 10 per cent baseline tariff on nearly all imported goods.
Following this, the White House plans to introduce varied "reciprocal tariffs" on 9 April against a host of its global trading partners, sparking widespread concerns of an escalating trade war that could tip the world into a recession.
US President Donald Trump stated that the new actions are intended to address trade imbalances and support increased domestic production. However, investor confidence ahead of this weekend appeared visibly shaken, as the US stock market closed on one of its worst days since the Covid pandemic.
“The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results,” Michael Arone, SPDR chief investment strategist at State Street Global Advisors, told American news outlet CNBC. “Investors are selling first and asking questions later.”
The marine industry also appears to be bracing for impact, given how more than half of industry purchases originate from US buyers. For instance, a 20 per cent tariff levied against incoming goods from the EU could ostensibly lead to increased costs for American buyers as well as upheavals in the brokerage market and a possible shift to alternative markets.
The European Boating Industry (EBI) has since expressed strong opposition to the updated tariff structure, while underlining the potential risks to businesses on both sides of the Atlantic.
"The boating industry is globally integrated and North America and Europe are the largest markets. Tariffs disrupt businesses, hinder economic growth, and jeopardise jobs," the EBI stated. "We welcome the EU’s objective to reach a negotiated solution with the US and EBI stands ready to contribute with proposals to enhance the recreational boating industry’s mutual success."
The US has also levied a 34 per cent tariff on imports from China, a 32 per cent tariff on goods from Taiwan and a 30 per cent tariff on South Africa – all of which have vested interests in the yacht-building industry.
On the other hand, the new tariff structure could pose an opportunity for countries with comparatively lower rates – such as Turkey, Australia and the UK – whose vessels would suddenly appear to undercut similarly sized alternatives on the basis of price.
The development comes one month after the US announced 25 per cent tariffs on steel and aluminium imports, which could have quite the impact on US industries reliant on those metals - including boat manufacturers. These producers could now face higher costs, which will ostensibly be passed along to the consumer.
Immediately following Trump's announcement on Tuesday, it remained unclear whether the additional reciprocal tariffs would be stacked on top of the previous steel and aluminium tariffs. However, Bloomberg has since suggested that steel and aluminium imports will be excluded from the new tariffs coming into effect, offering some measure of relief to American marine businesses.
Frank Hugelmeyer, President and CEO of the National Marine Manufacturers Association (NMMA), issued a response shortly after the new tariff structure was revealed, which acknowledged the US administration's efforts to support US manufacturing while also offering a word of caution when it comes to maintaining global trade relations. "The United States is home to the world’s largest recreational boating market – and we’re proud to be an American-made industry, with 95 per cent of boats sold here built here," he said. "As a leading domestic manufacturing industry with worldwide demand, our success depends on a stable, integrated supply chain, which is why we strongly support efforts to strengthen U.S. manufacturing and expand access to global markets."
Hugelmeyer continued: "As we navigate global challenges—from inflation and high interest rates to shifting trade dynamics—marine manufacturers are adapting, but transitions take time. Our industry needs the right tools and policies to remain competitive without sacrificing American jobs or production."