Metal tariffs pose threat to Elkhart County economy, RV and boat manufacturers warn

Both industries have a heavy presence in Elkhart County.

“Unfortunately the consumers will pay more for the purchase of a boat if this tariff goes through,” said Peter Barrett senior vice president of marketing and development for Smoker-Craft, a boat manufacturer in New Paris.

On Thursday, President Donald Trump delivered on a campaign promise to level punishing tariffs on imported steel and aluminum. He said the tariffs are needed to protect steel and aluminum industries vital to the nation’s defense.

The steel tariff will be 25 percent and the aluminum tariff 10 percent. Trump said Mexico and Canada will be exempt from the tariffs while negotiations for changes to the North American Free Trade Agreement are conducted.

Barrett said early Thursday that tracking the exact impact on his company’s boats will take some time as a variety of aluminum types are used. The company uses rolled, painted rolled, sheet and extruded aluminum from several sources, both domestic and imported.

Boat manufacturers have been experiencing good sales volumes the past few years, Barrett said and the National Marine Manufacturers Association believes the tariffs will harm the industry.

“The administration’s short-sighted decision to implement new tariffs is meant to fulfill a campaign promise rather than support robust, pro-growth trade policy,” the NMMA said in a statement issued shortly after Trump made his announcement Thursday. “This action will hurt countless manufacturers and uniquely American industries like ours that support 650,000 American jobs and $37 billion in sales each year. Ninety-five percent of all boats sold in America are made in America.”

THE RV RESPONSE

Recreational vehicle manufacturers took a similar angry stance against the tariffs.

Jay Landers, vice president for government affairs for the Recreation Vehicle Industry Association told The Goshen News that Trump’s concern was that some foreign governments are dumping cheap steel that ends up in the United States.

“He asked the Department of Commerce to look into how we could fight back,” Landers said. “But what he has done is taken a chainsaw to address an issue he should be using a scalpel on. He has also couched these tariff issues under national security, but that doesn’t make sense.”

According to Landers, just 2 to 3 percent of the nation’s steel is imported from China while 16 percent comes from the country’s friendly northern ally Canada.

“It is the wrong approach,” Landers said of the near universal tariffs on the metals.

Landers envisions several scenarios that could slow or reverse the nine-year climb of RV sales.

He said interest rates are increasing at the same time the tariffs will raise prices of all sorts of products, including RVs. He also said it’s possible the tariffs will lead to slower job growth or even higher unemployment.

“Who knows,” he speculated. “If a number of downstream industries start to layoff, people are not going to buy an RV, that is for sure.”

FIGHTING BACK

RV manufacturers had been embracing some of the president’s policies, including deregulation of manufacturers and his tax cut plan, according to Landers. But now the industry has had join with other industries to ask representatives in Congress to staunch the tariffs.

“On the federal level we have to generally work through coalitions,” he said. “So we are also working with the marine manufactures and several others with a common interest. We have been in constant contact with Jackie Walorski because she is on the House Ways and Means Committee and she did a good job of pushing back, to no avail.”

Walorski represents Indiana’s 2nd District in the U.S. House of Representatives. The district includes Elkhart County.

Walorski wrote Trump March 2 and told him that after he announced the tariffs were coming, a local manufacturer canceled plans for an expansion. She did not name the company.

“Early feedback from manufacturers in my district has me worried that immediate, blanket tariffs could reverse the economic recovery and return of manufacturing jobs to northern Indiana,” Walorski wrote in that letter.

Thursday, after Trump made the tariffs official, she reaffirmed that local jobs are at risk.

“While the exemption of some U.S. trading partners is a step in the right direction,” Walorski announced in a news release, “these tariffs remain too broad and will put Hoosier jobs at risk. Anything other than a balanced and targeted approach will raise costs for manufacturers, slow our economic momentum and let bad actors like China off the hook.”

The Goshen Chamber of Commerce board of directors also has concerns about the local impact of the tariffs, according to Chamber Executive Director Nick Kieffer. He said the negative impact will stretch beyond the marine and RV industries and the higher cost of the two metals will hit the local automotive parts industry as well as tool and die shops.

“It’s impact on finished products on several different touch points,” Kieffer said, “is where it becomes a pretty good challenge for any industry.”

Kieffer said the local Chamber has also contacted Walorski and U.S. Senators Todd Young and Joe Donnelly asking for their help.

But in the end, all the pressure that Congress and manufacturers can put on Trump may not be enough to kill the tariffs, according to Landers.

“If all the leaders in the Congress could not dissuade Mr. Trump,” Landers said, “then the RVIA and all the marine manufactures are not going to dissuade him either.”