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Escalating tit-for-tat trade war tariffs applying pricing pressure to global aftermarket suppliers

Thursday, August 2, 2018 - 07:00
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The U.S. recreational vehicle segment annually uses more than a million metal propane cylinders for on-the-road cooking and hot water needs. Including self-contained RVs, towable camping trailers and “toy haulers” for cars and ATVs, more than 90 percent of the domestic industry’s vehicle exports go to Canada, accounting for nearly 10 percent of all American-made shipments. Mexico is also a top RV recipient with 2 percent of the export market.

“These new tariffs will negatively affect the RV industry and its many supplier companies that use steel and aluminum, even those who source their steel and aluminum from domestic producers,” says Jay Landers, vice president of government affairs at the Recreational Vehicle Industry Association (RVIA) “Our members are building a record number of RVs, and the uncertainty around the implementation of these new tariffs will impact their ability to continue at that rate.”

“Even though the American-made RV industry overwhelmingly uses domestic aluminum in the manufacturing of RVs and their component parts, since the announcement of the aluminum investigation our members have reported an increase in the price of domestic aluminum anywhere from 10 percent to 40 percent,” adds Mike Ochs, RVIA’s director of federal government affairs. “The increase in domestic aluminum prices threatens the booming RV industry by increasing prices to consumers, as has historically been the result of increased tariffs and duties.”

Also coming with warmer weather are increased opportunities for enjoying custom-car cruising amid the $41.2-billion specialty automotive industry, which has also seen steep price hikes. According to Specialty Equipment Market Association (SEMA), its members “are now having to make tough decisions about passing those costs along to the consumer.”

The membership employs more than a million people producing, distributing and selling a wide range of merchandise, from custom wheels to turbochargers, lighting equipment, exhaust systems, suspensions, truck caps, mobile electronics and other appearance and performance enhancements: “The supply chain for these parts is global, integrated and complex. Beyond domestic sales, SEMA member companies have a robust export market.”

“The United States has helped create a global free trade system that includes mechanisms for addressing unfair trade practices,” says SEMA President & CEO Christopher J. Kersting. “SEMA cautions the President and lawmakers to work with our trading partners and employ U.S. law judiciously. The current tariffs are a tax on American companies and consumers that are causing unnecessary harm.”

He goes on to point out that “SEMA welcomes efforts by the U.S. government to protect American companies and their customers from unfair trading practices. We urge the President and Congress to pursue trade infringements in a fashion that does not inflict unintended economic harm.”

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