How Will Donald Trump's Tariffs Affect the Balearic Nautical Industry?

The imminent imposition of tariffs by the United States on European products is creating uncertainty in the European nautical sector, and of course, in the Balearic sector as well.

The U.S. market is very attractive for the nautical industry, not only because of its 140,000 km of coastline but also because of its large population and enthusiasm for nautical activities, making it a prime target for shipyards and companies involved in boat motors and nautical accessories.

According to the latest data published by the U.S. International Trade Commission (USITC), Spain currently ranks 19th among the top exporters of vessels to the U.S., with a growth of 16.14% from the previous year, a significant figure when considering the performance and evolution of vessels in Spain, which has been declining for two years.

Faced with this situation, the European Boating Industry (EBI), of which the National Association of Nautical Companies (ANEN) is a part, and by extension the Balearic Association of Nautical Companies, is positioning itself regarding the tariffs that the U.S. will impose on steel and aluminum imports starting next March 12 and the possible countermeasures that the EU is considering. A trade war that will have implications for the nautical industry.

U.S. President Donald Trump stated on Wednesday, February 26, in the first cabinet meeting of his second term, that the European Union "was formed to screw the United States" and noted that the planned tariffs for the European community would be around 25%. "We have made a decision. We will announce it very soon and it will generally be 25%, for cars and other things," Trump emphasized.

It should be noted that in 2018, the U.S. already imposed tariffs on EU steel and aluminum imports for national security reasons. The European Union responded with retaliatory tariffs on U.S. products, including recreational vessels (taxed at 25%). In November 2021, both sides agreed to a temporary suspension of these tariffs on U.S. vessels, extended until March 31, 2025.

If new tariffs are ultimately applied, they would increase the production costs of European shipyards and, consequently, of European vessels and products in the U.S., which could influence the purchasing decisions of U.S. consumers and the competitiveness of European brands against those from other origins.

Furthermore, the EU might include the reinstatement or increase of tariffs on U.S. products, again affecting the nautical industry, as U.S. boat and accessory imports would also be impacted, with repercussions for distributors in Spain that represent and market boats, accessories, and items made in the U.S.

Although the Balearic Islands, despite being a reference nautical hub in Europe, do not have a particularly relevant position in the export of recreational boats, they do play a role in the distribution of materials for refitting and various accessories. However, the potential imposition of tariffs could negatively affect the growth and competitiveness of refit & repair companies, especially those dealing with large lengths.