EU taxes: What consequences for the import of US vessels?

Cobalt Boats A36 star

The European Union has announced the introduction of customs tariffs on pleasure craft from the United States, as of 22 June 2018. BoatIndustry questioned importers of American brands of boating on the consequences for the French market.

Vessels taxed from 22 June 2018

Decided in retaliation for the US taxes on the import of steel and aluminium into the United States by the Trump administration, a series of customs tariffs are being put in place on Friday 22 June 2018. They affect the yachting sector in particular, through a 25% tax on the following categories of boats:

  • Sailing, recreational or sports boats, whether or not with auxiliary motor, for maritime navigation
  • Sailing, recreational or sports boats, whether or not with auxiliary motor (other than for maritime navigation)
  • Motorboats, recreational or sports boats (other than outboard motor), for maritime navigation
  • Motorboats, recreational or sports boats (other than outboard motor) (other than for maritime navigation), length <=
  • Boats, recreational or sports, motorboat (other than outboard motor) (other than for marine navigation), length > 7.5 m
  • Boats, pleasure or sports boats, rowing boats and canoes, unit weight <=
  • Boats, pleasure or sports boats, rowing boats and canoes, unit weight > 100 kg, length <=
  • Boats, recreational or sports boats, rowing boats and canoes, unit weight > 100 kg, length > 7.5 m (except motor boats other than outboard motor boats, sailing boats, whether or not with auxiliary motor, and inflatable boats)

Apart from inflatable boats, all pleasure craft imported from the United States will therefore suffer from this sharp increase in customs duties.

A heavy uncertainty

Although future taxes had been considered for several weeks, the French nautical sector did not have time to prepare for them. While awaiting the declarations of the American shipyards, several importers did not wish to express themselves. Uncertainty about the timing of taxes and the duration of their application in the event of an agreement with the US government harms professionals. "How will this work for the boats we have already ordered and paid for, but which have not yet arrived?" asks Alban Ramora-Mazier, manager of Inshore Yachts, distributor of the Chris-Craft and Cobalt Boats brands. "This political uncertainty is having an impact on our purchases. On the other hand, how will American brands produced in Poland such as Sea-Ray or the American shipyards owned by the Bénéteau Group be taxed?"

Tariff issue

In addition to administrative issues, the impact of a 25% tax on boat prices will have commercial consequences. "Our Chris Craft and Cobalt brands are already in the high-end segment, if we add 25% it will be difficult. As far as we know, the worksites will not make any effort. For Cobalt, international business represents only 3% of the activity. It will be up to us to implement the price increase," adds Alban Ramora-Mazier. "In addition, a 25% uncertainty about the final price for a 600,000? boat makes the discussion with the customer problematic."

And then what?

Future discussions at the WTO between the United States and the European Union will indicate whether the situation persists. Let us hope for the French boating industry that the law of retaliation, which is fashionable in the current period, does not push the United States to take customs measures against European ships.

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