Canada Announces Tariffs On US-Made Boats

The Government of Canada announced late last week that it will impose more than C$16b in tariffs on a variety of US-made goods in retaliation against new US tariffs on steel and aluminum. The new Canadian countermeasures, scheduled to take effect on July 1, will assess a 10% import duty on a laundry list of US-made goods, including boats.

The action comes in response to the Trump administration’s decision to proceed with tariffs of 10% and 25% respectively on aluminum and steel imported from Canada, Mexico and the European Union (EU). Said to represent the strongest trade action Canada has taken since the second world war, the retaliatory countermeasures specifically list inflatable boats, sailboats, and both outboard-powered and inboard-powered motor boats as being subject to new tariffs.

The relationship between Canada and the US has been strained since US president Donald Trump first announced the new steel and aluminum duties in March. At that time the National Marine Manufacturers Association (NMMA) issued a statement in which president Thom Dammrich heavily criticized the president’s direction. “Today’s decision by the administration to implement new tariffs severely harms the $37 billion US recreational boating industry and the 650,000 American workers it supports,” said Dammrich. “The implementation of these aluminum tariffs, in combination with the additional, even larger tariffs on aluminum sheet proposed by the Department of Commerce, will drive up the costs of the aluminum used to manufacture more than 111,000 aluminum boats, such as pontoons and fishing boats, which make up 43 percent of new powerboat sales each year.”

Mexico has also responded with an extensive list of its own new countermeasure tariffs, while the EU announced it would trigger a dispute settlement case at the WTO. Meanwhile, as Canada and Mexico plan to implement their own tit-for-tat duties, negotiations with the US on renewing the North American Free Trade Agreement (NAFTA) continue, with many seeing the latest trade moves as little more than posturing for stronger negotiating positions.