From the Shop: Let’s talk Tariffs.

Trade wars and tariffs have been in the news lately.  Soybean farmers are facing losing foreign markets, Walmart says it’s going to raise prices because of it.  I know you probably haven’t been lying awake at night, wondering how the current tariff fight has been effecting the whitewater canoe industry in the US.  It might seem strange that my good ol’ little one-man made-in-the-USA canoe business out in the woods of New Hampshire is feeling the effects of international trade policies, but I’ll take a shot at explaining it.

Let’s start with steel and aluminum tariffs.  A little over a year ago, the Trump administration started imposing tariffs on steel and aluminum imports, and in June 2018, extended those tariffs to imports from the EU, Canada, and Mexico.  I use relatively little steel (nuts and bolts) and aluminum (footage rails) in my boats, but one of my biggest expenses is boat molds- which, you guessed it, turn out to be made of cast aluminum with a steel frame.  But the bigger effects of these tariffs on my business have been the retaliatory tariffs from the EU and Canada.  Apparently these countries didn’t like getting slapped with tariffs for no apparently reason, so the slapped back with tariffs of their own on a whole bunch of US made goods.  Among those is Harmonized Tariff code 8903.99: Yachts And Other Vessels For Pleasure Or Sports Others; Row Boats And Canoes (not Designed To Be Principally Used With Motors Or Sails) Others.  Canada imposed a tariff of 10% and the EU took it to 25%.  While the number of boats I exported in years past has been relatively small, it was still a significant portion of my business, which has now all but dried up.  Further more, at the beginning of 2018, I was investigating way to expand my distribution in Europe, but with these tariffs, that’s no longer possible in a way that would be profitable.  Now for the kicker- The US government has not responded with additional tariffs on imported boats.  And guess where my biggest competitors are located…

And then there’s the trade war with China.  I’ll start buy saying that I’m still proud to make my boats in the US, I’m a fan of American manufacturing, and I like purchasing goods made in the US when I can.  So I’m a little sheepish to admit that I bought the mold for the Mosquito Burrito from China.  I quoted it both from the US and China, and I appreciate the idea that the government is ostensibly trying to protect American businesses, but even with the tariff, it turned out to be a lot cheaper to go to China.  On a boat that I might someday break even on, having the mold made in the US would have made the project totally unaffordable.  I would have felt better about buying an American made molde, but it wouldn’t have happened.  The 25% tariff  on the mold is now just money I now can’t spend to grow my business in other ways.  Maybe the government will spend it on subsidies for the soybean farmers instead, I just don’t know.

At least for my business, this fight is almost entirely negative.