US economy

Boating company Mercury Marine gets break on tariffs for its Chinese-made outboard engines


Boating engine company Mercury Marine has been granted exclusions from 25 percent tariffs for its outboard engines manufactured in China.

The requests, made by Mercury’s parent, Brunswick Corp., were approved by the U.S. Trade Representative office, Brunswick said this week.

As a result, Chinese-made Mercury engines from 40 to 60 horsepower are no longer subject to a 25 percent import tax the U.S. placed on more than 1,000 made-in-China products.

Brunswick said the exclusions will lower its net pretax tariff impact in 2019 to about $17 million to $22 million, down from an earlier estimate of $30 million to $35 million.

Moreover, the company says the retroactive nature of the exclusions will benefit its 2018 pretax earnings.

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The exclusions were approved by the U.S. Customs and Border Protection agency as well as the U.S. Trade Representative office.

“We are pleased that the USTR and CBP have approved the exclusion requests for these classes of outboard engines which are very popular choices for fishing and family boating activities,” Brunswick Chairman and CEO Mark Schwabero said in a statement.

“It is good for consumers as well as for American manufacturers. We remain hopeful that the trade issues which led to the imposition of tariffs and subsequent retaliatory tariffs can be resolved quickly and amicably between the U.S. and its trading partners,” Schwabero said.

In June, President Donald Trump announced steep tariffs on aluminum from China, in addition to tariffs on aluminum and steel imported from Canada, Mexico and the European Union.

U.S. boat builders have seen about a 35 percent price increase for aluminum, even though most get their metal domestically.

The impact of the trade wars will likely carry over into 2019, according to the National Marine Manufacturers Association. 

“In simple terms, this is troubling news for marine manufacturers and the people they employ. Aluminum boats represent 44 percent of new boats sold each year and account for approximately 22,000 American jobs,” NMMA President Tom Dammrich said in a statement earlier this month. 

“NMMA is calling on the Trump administration to back off their tariffs-first trade policy. Very few people deny that our trading relationships, especially with China, need to be reformed, but the current strategy is counterproductive,” Dammrich said.



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