ORLANDO, Fla. -- A longtime Orlando company is preparing to weather a big storm: retaliatory tariffs from the E.U., Canada and Mexico, now in place.
- Boating company concerned about retalitory tariffs
- Tariffs now in place from the E.U., Canada and Mexico
- Regal Marine Industries bracing for big loss
“These tariffs are a big deal," said Duane Kuck. “It’s going to get back to the U.S. and its employment."
For the last fifty years, Kuck's family has owned and operated Regal Marine Industries. The boating company, which started with six employees, has grown exponentially. It now employs 750 people between its Jetport Drive location by Orlando International Airport and another factory in Valdosta, GA.
They build around 2,000 boats a year, sending them around the globe.
Kuck said that it's not a hobby; it's his passion, and one shared by many others.
“Boating is one of those things that really brings the family together … we find a lot of enthusiasm and energy around the idea of helping families get closer and building special memories," he explained.
But, Regal's president and CEO is worried that retaliatory E.U. tariffs will mean a big loss: around $13 million dollars each year.
“Most of our business going to the tariff regions, Canada, E.U. and Mexico, have just been put on hold or orders cancelled," he said, explaining that to get ahead of the tariff, they sent ten newly-constructed boats to Canada, almost wiping our their showroom stock.
According to the National Marine Manufacturers Association, with export tariffs to the E.U., Mexico and Canada of 20, 15 and 10 percent respectively, boat exports to those regions represent 69 percent of all U.S. made boats. And the business has essentially "frozen up."
“We’d like to see this trade war ended as soon as possible. We acknowledge and agree China has not been playing fair … But, we don’t believe tariffs are the answer. We believe the answer is to get President Trump to the negotiating table with the president of China to negotiate a bilateral trade agreement," said the association's president, Thom Dammrich, on the phone today.
After all, the industry is large in the U.S., employing about 470,000 people; of that number, 55,000 are direct jobs in Florida.
There are also 5,500 related businesses in Florida, according to the association.
Dammrich shared that the economic impact of recreational boating in the sunshine state -- the number one boating state in the country -- is roughly $10.3 billion a year. Florida tops the U.S. in terms of total number registered boats and spending annually, plus measures high on the list of boat production.
“The industry welcomed the tax cuts earlier in the year, but believe the trade war will completely offset any gains from the tax cuts," added Dammrich.
“It’s a huge disadvantage for the U.S. marine industry," said Kuck.
While they, too, benefited from the tax reform -- investing in new products and bonuses for the team -- and want trade to be fair, right now the industry is up against a rising tide of problems.
The business owner said that he doesn't want to have to lay any workers off. And the additional hires they were planning on making are on hold. They're now hoping to boost their business in the states as they pivot from the tariffed regions.
“It’s a storm we’re going to deal with and we gotta believe good solutions will be found that are fair to everyone," he said. “We’re happy to compete on a level fair playing field. But, obviously competing against a 25 percent tariff going in is not going to allow that.”