Freedonia Analyst Discusses Effects of the USMCA on the RV and Boating Industries
CLEVELAND, Oct. 11, 2018 /PRNewswire/ -- Following the formal announcement of the United States-Mexico-Canada Agreement (USMCA) on October 1(st), both the Recreational Vehicle Industry Association (RVIA) and the National Marine Manufacturers Association (NMMA) voiced their support of the agreement.
The RVIA declared the USMCA a victory for the RV industry as motorhomes and travel trailers will get to keep the previous rules of origin that were set up by NAFTA. Those rules state that domestic content must make up 62.5% of motorhomes and 50% travel trailers in order for those items to be considered duty-free.
Similarly, the Agreement was applauded by NMMA for continuing the rules of origin for marine engines and boats set by NAFTA. However, the USMCA does not remove the Section 232 tariffs on aluminum and steel nor the retaliatory tariffs imposed by Canada and Mexico. The retaliatory tariffs by Canada and Mexico directly targeted US-made recreational boats.
The Presidents of NMMA and NMMA Canada are optimistic that these additional issues will be resolved, stating "that yesterday's agreement puts us on a path to remove Section 232 tariffs and subsequent retaliation."
According to Freedonia Group Analyst Dan Debelius, "The USMCA is a step in the right direction for the RV and boating industries. Both of these industries have rebounded well from a tough post-recession period, but the recent tariffs and retaliatory actions have staunched some optimism and hindered sales. While it remains to be seen what the full effects of the current tariffs will do, exports to Canada and Mexico have stalled this year."
Debelius continues: "The Section 232 tariffs and the tariffs affecting components imported from China were and remain harmful for both the RV and boating industries. Moreover, the boating industry was hit with retaliatory tariffs from Canada, Mexico, and the EU, and most recently, China, on US-made recreational boats. The longer that these tariffs remain in place, the more harm it will do to these thriving industries."
Lastly, Debelius states, "Although the USMCA will take time to be reviewed by each country, it is definitely an optimistic sign for the RV and boat industries. Still, significant work needs to be done to smooth out US trade relations with Canada and Mexico, not to mention China and the EU."
Additional analysis of the factors affecting demand in the US market can be found in the following Freedonia reports:
Recreational Vehicles in the US
Recreational Boating in the US
About The Freedonia Group - The Freedonia Group, a division of MarketResearch.com, is a leading international industrial research company publishing more than 100 studies annually. Since 1985 we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia Group research to help with their strategic planning. Each study includes product and market analyses and forecasts, in-depth discussions of important industry trends, and market share information. Studies can be purchased at www.freedoniagroup.com and are also available on www.marketresearch.com and www.profound.com.
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SOURCE The Freedonia Group
