EU-US Joint Statement on Tariffs and Further Cooperation

For Europe’s boating industry, the agreed 15% US tariff on boats, engines and components brings stability but also new challenges, says EBI

The EU-US joint statement on trade was published today. It implements the political agreement between President Trump and President von der Leyen from end-July.

The key aspects of the agreement which are relevant to the boating sector can be summarised as follows.

The EU will eliminate tariffs on imports of all US industrial goods. The US will apply a tariff rate of 15% as expected on products originating from the EU. This will be the maximum rate comprising all previously applicable tariffs. This means that for boats, engines and components the 15% tariff applies. Only where the previously applicable US Most Favoured Nation (MFN) tariff is equal to or higher than 15%, will the higher MFN rate continue to apply.

Some EU products are exempt from the 15% US tariff rate, such as generic pharmaceuticals and aircraft, and there is a commitment by the US and EU to consider other sectors and products that are important for both economies and value chains to be included in the list of products for which only the previously applicable MFN tariff would apply.

Further cooperation on non-tariff barriers is planned, including technical cooperation on standards development in key sectors of mutual interest, as well as facilitating conformity assessments to cover additional industrial sectors. There is no insight yet whether this will also cover legislation or standards related to the recreational boating sector.

The Joint Statement is a political agreement and not legally binding. Both sides will now legally implement the key commitments contained in the Joint Statement. On the EU side, it will be taken forward in consultation with Member States and the European Parliament.

A second update is the expansion of the US tariffs on aluminium and steel imports that could be relevant for some exporters of products with aluminium and steel derivative products to the US:

The US Department of Commerce has expanded its Section 232 tariffs on aluminium and steel imports, adding more product codes to the existing list of tariffs on aluminium and steel derivative products. Since Monday 18 August, the metal content of the products is now subject to the 50% tariff. Several products related to recreational boats could now be subject to these new tariff rates .There are a number of potentially relevant products on the list, including engines, pumps, trailers and parts of other components. Further product codes may be added in future by the US Department for Commerce.

For now, this still applies to imports from the EU as the negotiations between the EU and US on steel and aluminium tariffs have not yet been concluded as part of the joint statement.

EBI ( European Boating Industry) commented to IBI that it takes note of the EU-US joint statement on trade and that It provides important predictability and stability ahead of the boat show season in Europe.The association goes on to say that:

“Although the statement averts the worst of a detrimental trade war, the increase of tariffs to 15% will be very challenging for many businesses and SMEs in Europe’s recreational boating industry. EBI calls on the European Commission to take the announcement as the basis for more sectoral negotiations and consider the needs of export-reliant industries in the sector. In addition EBI suggests a better regulatory environment needs to be created to grow the European market, reduce red tape, and support our sector across all areas from trade to investment, environmental and industry policy.”