Opinion: Why Michigan needs pro-growth trade policy
Michigan and manufacturing go hand in hand. While most immediately think of automobile manufacturing, another uniquely American industry thrives in Michigan: Recreational boating.
Nationally, the recreational boating industry boasts $37 billion in total sales and in Michigan alone, $868 million is spent on boats and marine accessories.
As a proud part of the marine manufacturing industry, I see the real impact of those numbers every day. At Avalon & Tahoe, I work alongside 350 team members building pontoon boats then sold through a dealer network of 220. Each one of these dealerships has five to 30 employees not to mention our suppliers who also have teams of dozens, if not hundreds, of employees. All in all, we’re just a part of the more than 40,000 Michiganders whose jobs rely on the recreational boating industry.
However, President Donald Trump’s recent actions on trade will hurt our business and the many American companies that use similar materials. These announcements have reverberated across the globe but it’s Michigan that we are worried about. We’ve been in Michigan since 1972 and we are proud of our contributions to our community. Whether it’s our expert team or our continual integration of new technology, Avalon is proud to be an American manufacturer.
Those who work in the recreational boating industry have felt job uncertainty since January; first, when the International Trade Commission ruled to move forward with an investigation of imported common alloy aluminum sheet from China. This investigation could result in a tariff on aluminum sheet from the Department of Commerce of 60 percent or more, which would impact the supply and prices of aluminum sheet back home.
In addition, Trump proposed Section 232 steel and aluminum tariffs, citing “national security threats” that nearly every industry and trade expert opposed. Then in March, the administration announced another investigation under Section 301 of the Trade Act of 1974, again targeting China, and again harming marine products like navigational, component and engine equipment.
All of these actions threaten the recreational boating industry and the 650,000 Americans who work in it. The consequences of the administration’s recent decisions on trade are dire for everyone involved, especially for the 142 million boaters across the nation.
My entry into the marine industry began when I, along with a handful of investors, purchased Playbuoy Pontoon Boats in 2000. I had spent the prior 20 years manufacturing coat hangers, boxes, ambulances, autos, cellphones, semiconductor equipment and computers. I love manufacturing because I love building and creating things of value. At Avalon, we have built a great brand and every one of our employees is dedicated to being the very best they can be. We have a high-performance team focused on building great products to meet our customers’ needs. We can only focus on fixing the issues and problems that are within our control. As with the rest of the public, we feel somewhat blindsided by the tariff issues and talk of escalating trade wars. Although it may put a significant dent in our growth, we have little control over these decisions and are starting to fear the worse. Our upward growth momentum and hiring spree may be coming to an abrupt end.
While the administration argues its recent actions target foreign manufacturers, there are greater penalties here at home. What President Trump doesn’t understand is that the recreational boating industry – along with the more than 1,400 businesses it supports in Michigan – will be adversely affected by his decisions.
For our business the collective impact of these recent trade actions means higher raw material costs, lower margins, larger price increases and slower sales.
Not only does imported aluminum create fair pricing and competition at home and abroad, it also provides the boating industry with more aluminum than American factories can produce. At Avalon & Tahoe, we buy only American made aluminum, but understand first-hand how government action can create a chain reaction that affects our supply chain. Tariffs on imports threaten to disrupt the supply chain, cause price increases in the domestic market, and risk the stability of the international market. The uncertainty of these tariffs could limit American manufacturers’ access to different types of aluminum, including the large sheets that are critical to marine manufactures like us.
Ninety-five percent of recreational boats purchased in the U.S. are made in the U.S. Therefore, these tariffs aren’t just ineffective, they actively undermine the administration’s stated goal to protect American manufacturing. In the case of marine manufacturing, 43 percent of new boats sold each year – more than 111,000 – are made of aluminum and rely on affordable common alloy aluminum sheet.
They call us the Great Lake State, and Michigan truly is great. Our access to all four beautiful lakes is unparalleled, and we take full advantage of all the state has to offer. We must push back on this aggressive attack on the recreational boating industry. Our business depends on it.
As Americans we do not have any control over the administration’s tariff decisions, but as Americans we have the right and a duty to use our collective voice to fight for the jobs that we have worked so hard for.
About the author
Jim Wolf is president & CEO of Avalon & Tahoe Manufacturing, Inc. in Alma, Michigan.