Tariffs on Chinese built boats?

Does anyone know what the current tariffs are on boats made in China imported into the US? My read of the user-hostile bureaucratese on line is that the 'special' tariff imposed by Trump is 30%, plus the previous 1.5% import duty. Is that correct? I haven't seen anything since then rescinding the tariff.

Thank you!

If anyone is interested, someone at the NMMA got back to me and told me the current tariff on boats made in China is 25%, plus the standard 1.5% import duty.

There are two possible exemptions to the 25% tariff. One in based on boat size and weight:

(79) Motorboats with displacement hulls of reinforced fiberglass and wood, each motorboat measuring not less than 14.47 m and not more than 36.57 m in length and weighing not less than 28 t and not more than 363 t, powered by inboard engines, other than inboard/outdrive (described in statistical reporting number 8903.92.0065).

and the other vague, nebulous language:

(a) Whether the particular product is available only from China and specifically whether the particular product and/or a comparable product is available from sources in the United States and/or third countries.
(b) Whether the imposition of additional duties on the particular product would cause severe economic harm to the requestor or other U.S. interests.
(c) Whether the particular product is strategically important or related to ‘‘Made in China 2025’’ or other Chinese industrial programs.

Hmmm.... seems crystal clear to me. Doesn't sound like there were any lobbyists influencing this regulation at all. Nope... no special interest groups had anything to do with crafting the potential exclusion language based on size, weight, and material.

I'm wondering if the Chinese government is paying all or part of the tariff? There are a number of areas where the government is paying to keep China competitive and their people working.

Ted

So power boats between 47' and 120' are exempt? Very interesting. I'm guessing the builders got that slipped in after the whole tariff thing got started.

Are there many boats still being manufactured in China? I would think that just the cost of transporting them to the U.S. would kill most sales and I don't think the Russians are still rich. It seems like Europeans are leaning toward Italian designs.

Just a thought.

pete

At least Selene and Nordhavn ( excepted the N41 built in Turkey) are built in Zuhai for Selene and Xiamen for Nordhavn

Pete Meisinger said:

Are there many boats still being manufactured in China? I would think that just the cost of transporting them to the U.S. would kill most sales and I don't think the Russians are still rich. It seems like Europeans are leaning toward Italian designs.

Just a thought.

pete

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O C Diver said:

I'm wondering if the Chinese government is paying all or part of the tariff? There are a number of areas where the government is paying to keep China competitive and their people working.

Ted

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I don't know about any other goods. I would imagine the Chinese government might want to step in with iPhone or other electronics production, but I don't know if that is happening.

I don't think it's happening with pleasure boats. One company I talked with simply added the tariff to the price. The other one I was most interested in (and pretty much ready to move forward with) doesn't do anything with the tariff, it's all on the US purchaser to pay.

I would always much prefer to 'buy US'. Unfortunately, a US made new boat in the size I would like (38-42 ft) is out of my budget. Buying 'American' would mean getting a much smaller boat. This tariff is of course complete nonsense. It's not 'punishing' Chinese companies by making them pay it as Trump says it is. It's punishing US consumers by forcing them to either pay more for the same product, or not buying the product. It is hurting Chinese companies by reducing their sales, but not by forcing them to pay the full tariff.

Oh well... back to the used boat listings.

Nick14 said:

It's not 'punishing' Chinese companies by making them pay it as Trump says it is. It's punishing US consumers by forcing them to either pay more for the same product, or not buying the product. It is hurting Chinese companies by reducing their sales, but not by forcing them to pay the full tariff.

Oh well... back to the used boat listings.

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I don't think it was about making the Chinese pay, it was about leveling the playing field and balancing trade. The Chinese have a bad habit of selling below cost to eliminate competition and then raising prices in the absence of competition. This is part of the problem the USA pharmaceutical industry has where most of the base materials come from China now. The net result has seen a number of companies seek manufacturing out of China (such as Nordhavn). The USA is far too dependent on China as we saw during the first round of Covid with PPE and ventilators. Sorry it's having an adverse effect on your boat purchase. Maybe your manufacturer will seek to move construction to a different country as Nordhavn did with the 41.

Ted

twistedtree said:

So power boats between 47' and 120' are exempt? Very interesting. I'm guessing the builders got that slipped in after the whole tariff thing got started.

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Which totally benefits the super-rich who can afford seven/eight-figure boats.

Pete Meisinger said:

..........It seems like Europeans are leaning toward Italian designs.

Just a thought.

pete

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Also the big French and German popular/mass produced yacht manufacturers have diversified into power boats, and along with Spain, UK and the Scandinavian countries they keep up plenty of production to supply the demand.

I was told at the height of the Italian boat building industry there were 240 builders.

At least the govt has not pulled a "Jimmy Carter" and put a luxury tax on all new boats. That caused many US boat builders out of business and the unemployment of skilled craftsman.

OldDan1943 said:

At least the govt has pulled a "Jimmy Carter" and put a luxury tax on all new boats.

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Bill Clinton and Congress repealed the federal luxury tax on boats. It expired January 2003.

O C Diver said:

In case you don't know, the top 5% in this country are paying almost 60% of the taxes and the bottom 50% are paying less than 4%. We may not live in a socialist utopia, but the federal government manages to redistribute a fair amount to those in need.

Ted

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Diver, I think that '5% ... paying almost 60% of the taxes' is a bit low.
May I suggest that "60%" is closer to 80+%

My point was, that luxury tax almost devastated the boat building industry in the US. A classic case of a luxury tax failing to achieve the desired effect of generating revenue.

O C Diver said:

I'm wondering if the Chinese government is paying all or part of the tariff? There are a number of areas where the government is paying to keep China competitive and their people working.

Ted

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The Chinese do not pay ANY part of an import tariff. The Ameican buyer pays the tariff when the boat is imported, well actually the importer pays it and then passes it along to the buyer.

CaptainSEA said:

At least Selene and Nordhavn ( excepted the N41 built in Turkey) are built in Zuhai for Selene and Xiamen for Nordhavn

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Several Nordhavn models are built in Taiwan too. Hampton's are China too. Also North Pacific. And I think a bunch more.

Nick14 said:

It's always dangerous to get into political discussions,

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So why start? Especially over an issue that is International in scope.

Tariffs are extremely transparent if one is seriously wanting to buy a new build Chinese made vessel, simply ask the builders. US, Canadian, Australian etc Import taxes and applicable sales taxes are likewise part of the negotiations. Thus the port of entry and flag of registry become important especially as the boat size and cost increases.

Many years ago Taiwan became a major builder of sizable vessels. For many reasons including business 101, Taiwanese builds are hugely popular.

OldDan1943 said:

At least the govt has not pulled a "Jimmy Carter" and put a luxury tax on all new boats. That caused many US boat builders out of business and the unemployment of skilled craftsman.

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Actually, it was Bush who enacted the 10% luxury tax in '91, and repealed by Clinton in '93

Mconaghys,
Marlow,
HH,
Halvorson ,
Cheoy Lee,
Hampton
Kingship
Palm Beach
Are a few more

It does mainly benefit Nordhavn, which apart from the new N41, manufacturing yard is in China.

markpierce said:

Which totally benefits the super-rich who can afford seven/eight-figure boats.

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CaptainSEA said:

It does mainly benefit Nordhavn, which apart from the new N41, manufacturing yard is in China.

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Again, Ta Shing is in Tainan Taiwan, and builds the Nordhavn 56MS, 68, and 76. They also built the 62, 64, 72, and either the 50 or the 57 (can't recall which). And all the Mason sail boats.

Cheoy Lee is building a motoryacht at a new factory in Doumen; Selene builds ocean trawlers from 36 to 72 feet at Jet-Tern Marine in Zhuhai; Australian company Halvorsen builds its Solo and Island Gypsy trawlers at several yards in China; Marlow builds passagemakers from 57 to 78 feet at a state-of-the-art facility in Xiamen and Seahorse builds trawlers at Zhuhai.
Hampton also builds in China.

CaptainSEA said:

At least Selene and Nordhavn ( excepted the N41 built in Turkey) are built in Zuhai for Selene and Xiamen for Nordhavn

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There are still many builders in mainland China. Marlow, Hampton, Diesel Duck, North Pacific to name a few.

Nordhavns are built in China, Taiwan and Turkey.

O C Diver said:

I don't think it was about making the Chinese pay, it was about leveling the playing field and balancing trade. The Chinese have a bad habit of selling below cost to eliminate competition and then raising prices in the absence of competition. This is part of the problem the USA pharmaceutical industry has where most of the base materials come from China now. The net result has seen a number of companies seek manufacturing out of China (such as Nordhavn). The USA is far too dependent on China as we saw during the first round of Covid with PPE and ventilators. Sorry it's having an adverse effect on your boat purchase. Maybe your manufacturer will seek to move construction to a different country as Nordhavn did with the 41.

Ted

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IMO, this is an excellent discussion for this forum. As boat owners, we have many choices that can affect the boating industry. As someone who imports products from all over the world, I know personally, that the Chinese government does exactly that which is stated above. They subsidize companies so that they win business. US consumers love it at first because we all love a decent product for a low price. But when governments subsidize their industries, competitors that are not being subsidize, like US boat builders, can't compete and are forced to build offshore. For all of us who complain about not being able to afford US boats (or any other product) and buy foreign, we are making a choice to buy a non-US made product, which is our choice that I don't deny. But most don't realize the long term impacts. Trump did say that the US consumer won't pay for this. Although this is not technically 100% true, it is partly true, in that the Chinese government has devalued the won by about 12.5% in the last few years (not a coincidence that tariffs occurred about then). This means that although the tariff is 25%, real cost is half of that. But that also means they are paying an additional 12.5% for US goods. The government still collects the 25% and redistributes within the USA. I'm against income redistribution, but politics aside, this definitely helps the US economy and US boat builders. But after that, think about all of the other suppliers that benefit (engine makers, after market parts, etc.). Like it or not buying American will help Americans. If you want to help others in the world, there are plenty of charities to do so.

No tariff on any vessels that are NOT US flagged, so a foreign flag of convenience exempts the vessel from the tariff. Also, the tariff is not based on the sale price of the vessel, it is the value of all the labor that occurs in China and the materials sourced there, so engines, gensets, hydraulics, cranes, compressors, a long list of items are excluded from the tariff calculation.

There is no trade tariff applied to boats built in Taiwan.
A lot of the Chinese builders are shipping some of their boats to Taiwan to be completed, then they are delivered to the US without tariffs.
Unfortunately a lot of the Taiwan yards are hurting because buyers are gun shy of placing a 3 or 4 million dollar order that might become embroiled in additional taxes before they can get delivery.

twistedtree said:

Actually, it was Bush who enacted the 10% luxury tax in '91, and repealed by Clinton in '93

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True but it is Congress that generates the bills to be signed.
Democrats controlled both the Senate and the House. Tom Foley (D) Speaker of the House....Robert Byrd (D) Senate Majority leader in 1991. So everyone takes part of the blame.

Why would you support China,? If you are an American buy an American built boat. Screw china. I can't believe anyone would ask such a question.

Little dougie said:

Why would you support China,? If you are an American buy an American built boat. Screw china. I can't believe anyone would ask such a question.

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Most likely because there are not a lot of boats built here and if the boat comes from China and it is what you want, then buy it. Because there probably isn’t one built here that meets their needs/wants. Would I rather buy American made, absolutely but the reality is that sometimes it just isn’t built here. That is just reality.

OldDan1943 said:

At least the govt has not pulled a "Jimmy Carter" and put a luxury tax on all new boats. That caused many US boat builders out of business and the unemployment of skilled craftsman.

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It is the same thing as the luxury tax. The US Gov't is collecting 25% of the cost of the boat from the importer, who then collects it from the buyer. That's a tax!!