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Bloomberg
They’re Donald Trump’s kind of business. They dominate the domestic market, rack up a trade surplus by selling to foreigners, and do a lot of their manufacturing in states that voted for him.
But America’s recreational boat-builders are getting caught up in the president’s trade war. With every escalation, they’ve taken a fresh hit.
The industry employs about 150,000 people directly and provides livelihoods for half-a-million more. It produces a whopping 95 percent of the boats sold in America (contrast that with cars, where little more than half are home-made), and squeezed out $1.5 billion of exports last year too, according to the National Marine Manufacturers Association.
It uses a lot of aluminum — so Trump’s initial salvo in March, slapping duties on imported metals, added to costs. Then came the itemised China tariffs. Hundreds of parts, from ball-bearings to engines and GPS navigation systems, went up in price. Meanwhile, Trump’s trade targets started firing back. Canada, Mexico and the European Union each had a list of U.S. goods to penalise — and recreational boats featured on all of them.
The EU’s charge is 25 percent. “A showstopper,’’ Stephen Heese calls it.
Heese is president of Chris-Craft in Sarasota, Florida, which has been making boats since 1874. It’s been sending them over to Europe for almost as long (including an interlude in the 1940s when the company halted production of luxury yachts and instead made some of the landing crafts used on D-Day.)
About a third of its markets are outside the US. Those exports have ground to a halt, says Heese. European dealers have to write a tariff check to customs as soon as they take delivery. With retail prices averaging about $300,000, it’s simply too big a markup for most of them, he said. And “if the dealer doesn’t have the boat in stock to show, the customer can’t see it.’’
Now owned by Winnebago Industries Inc., Chris-Craft employs some 400 people, three-quarters of them in manufacturing. It’s headquartered on Sarasota’s 15th Street, a neighborhood once dotted with boat-makers, though only a few are left. Out front, there’s a “Help Wanted’’ sign. But the story’s more complex.
The company had been planning to create some 30 new jobs. Then it lost $3 million in overseas orders as a result of the tariffs, and froze all hiring plans. Later, US dealers picked up some of the slack, according to Heese, and Chris-Craft ended up adding about 20 people.