Retaliatory tariff lifted on U.S. imported boats

Published: May 6, 2019

Boat Photo by Shutterstock/mtr

On April 30, the federal government lifted the retaliatory tariff imposed on boats imported from the United States. The rollback comes after nearly a year of lobbying from Canada’s boating industry. “I think that everyone is relieved,” says Sara Anghel, the president of the National Marine Manufacturers Association Canada (NMMA).

The 10 per cent boat tariff was imposed on July 1, 2018, on inflatable boats, sailboats, and outboard and other motorboats in response to the June 1, 2018, U.S. tariffs placed on imported Canadian steel, aluminum, and other products. According to Canada’s federal government, the retaliatory tariffs imposed on U.S. consumer products like boats, maple syrup, and lawn mowers were an attempt to target goods that Canadians could buy from domestic suppliers.

But the boat tariff ended up having a severe impact on Canada’s boating industry. “Probably 85 if not 90 per cent of the boats that are sold in Canada are actually imported from the States,” Anghel says. Dealerships, in particular, took a hit, as many are family-run businesses in Canadian cottage country who import U.S. boats for sale.

Anghel says the 10 per cent tariff caused Canadian consumers to rethink buying a boat this past year. “Everybody kind of stepped back and said, ‘Oh, wait a second. I’m not buying or I’m not importing until the tariffs come off.’ And yet, the U.S. market was still doing well, so all this was doing was hurting jobs.”

Job cuts hit Canadian dealers as the tariff lessened the demand for their product, keeping sales low and forcing them to contemplate layoffs in order to stay in business, Anghel says.

But with the lifting of the tariffs, the market should return to normal. “[The federal government] eventually heard us,” Anghel says. “They heard that this was not something that was going to make an impact on their trade war situation with the U.S. So, they decided to take the tariffs off effective April 30.”

The tariff has been lifted on all types of boats, leaving Canadians free to buy boats manufactured in the U.S. without worrying about added fees.

Looking forward, businesses still have to make decisions for their own dealership on how they will deal with the repercussions left by the tariff. Anghel says dealerships may be looking to import more U.S. boats now that the tariff has been dropped in order to make up for the recent dip in sales.

“It’s over now, and that’s great news, and we’ll move forward,” she says. “We’re all going to be on the water and enjoying our cottages.”

 

 

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