The impact of tariffs on the UK marine industry

By Haven Knox-Johnston Commercial

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UK marine industry faces uncertainty
over tariffs

With much in the news about the economy, in this latest article, we have delved into the current situation regarding a truly hot topic for businesses across the globe, tariffs! We are not immune to the impact and the UK marine industry is bracing itself for increased uncertainty following a raft of announcements and subsequent backtracking regarding the implementation of American trade tariffs.

Tariffs were initially announced for certain imports from Canada and Mexico, but on March 6 2025, the USA’s Trump administration announced it would delay implementing these. The tariffs, covered under the USMCA trade agreement are now scheduled to take effect on April 2.

However, on March 12 2025, the US administration reinstated 25% tariffs on all steel and aluminium imports – tariffs that were originally introduced in 2018 in President Trump’s first term and suspended in December 2023.

The current reinstatement expands the scope of the original tariffs by eliminating previous country exemptions and product exclusions. This will have an effect on the UK’s marine industry, for both importers and exporters.

The steel and aluminium tariffs will apply on industrial-grade steel and aluminium, other steel and aluminium semifinished and finished products and also their derivative commercial products including machinery parts and other equipment.[1]

In addition, the British Chambers of Commerce reports [2] that on top of the 25% steel and aluminium tariffs, the UK is facing similar additional charges for copper and lumber.

Two workers in orange overalls repair a boat, sanding the hull and painting the top, fueling maritime business growth.

So far, the UK’s Prime Minister, Keir Starmer, has said the UK will ‘keep all options on the table’ but has not announced any retaliatory tariffs. The UK is still hoping to agree a free trade deal with the US, but the White House has also said it will take into account countries’ Value Added Tax (VAT) rates – the UK has a standard 20% VAT rate – when imposing tariffs.

Tariffs mean prices and costs will inevitably go up and this is a lose-lose scenario for consumers, businesses, and economic growth, says William Bain, head of trade policy with the British Chamber of Commerce, who has pointed out that prior to the reintroduction of the steel and aluminium tariffs, the UK’s manufacturing exporters were already concerned.[3]

Illustration of a sailboat with a person climbing the mast and another person on deck, featuring a red wave design on the sail.

The imposed tariffs are set to adversely affect the UK’s marine industry. Many believe Britain’s economy will be hit with a slow-down in trade and slower GDP growth, with predictions that the steel and aluminium tariffs will have broader economic implications for the UK extending beyond the industry itself.

Increased costs for aluminium and steel products are expected to lead to higher prices for consumers as manufacturers are predicted to raise prices on a range of goods using steel and aluminium components.

The aluminium and steel industries are part of a more extensive supply chain that supports various jobs in the marine industry. Disruptions in the supply chain could lead to job losses and economic downturns in many sectors, particularly those reliant on stable aluminium and steel prices.

In addition, it is envisioned that consumer confidence and spending will be affected as consumers and businesses deal with higher costs stemming from these tariffs.

“It’s absolutely the case that even if tariffs aren’t applied to the UK, we will be affected by slowing global trade, by slower GDP growth and by higher inflation than otherwise would be the case,” said chancellor Rachel Reeves earlier in March when she was speaking at industry body Make UK’s National Manufacturing Conference in central London.

And the governor of the Bank of England, Andrew Bailey, has also warned the tariffs could mean less money in consumer’s pockets.

“The risks to the UK economy, and indeed the world economy, are substantial,” he has said.[4]

Increased tariffs may also cause disruption to shipping and global supply chains with experts predicting that the tariffs will lead to a drag on freight demand, resulting in higher costs for shippers that are generally passed onto end consumers.[5]

In 2023, the UK imported $50 million worth of ships, boats and other floating structures on top of various equipment and parts [6] and the importers of these products are keenly watching these latest developments.

Illustration of a cargo ship with a large open cargo hold and a crane on the deck for loading and unloading materials.

With regards to exports, the UK marine industry exported £937 million of boats and marine equipment in 2022-23 driven by demand for sailing yachts, rigid inflatables, and luxury motor yachts, with a significant proportion exported to the US.[7]

The global marine industry relies on aluminium and steel for boat building and marine equipment. Boatbuilders are set to face increased production costs and potential disruption in supply chains and these additional production costs are likely to be passed on to the end consumer with price rises.

Steel and aluminium components are used by various UK supply chains that export to the US and both sides will now need to negotiate the effect these new tariffs will have and the impact on businesses.

The situation regarding the marine industry is highlighted by the European Boating Industry (EBI) [8] which is pointing out potential risks to European businesses and the supply chain. The EBI says the imposition of retaliatory tariffs will have significant negative consequences stating that tariffs disrupt businesses, hinder economic growth, and jeopardise jobs, particularly for small and medium-sized enterprises (SMEs) that form the backbone of the boating and marine industry in Europe and the EU as a whole.

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The EBI also points out that the tariffs are unrelated to the recreational boating sector, as they arise from the steel and aluminium dispute. The association points out that the permanent removal of tariffs on unrelated sectors, such as recreational boats, would instead support economic growth on both sides of the Atlantic.

The American based National Marine Manufacturers Association (NMMA) is also calling for new trade measures to support fair trade without imposing undue burdens on American manufacturers.[9] The NMMA says any measures implemented should consider the unique needs of the recreational marine industry.

In retaliation to the US steel and aluminium tariffs, the European Commission has announced that a raft of tariffs on American product imports, including recreational boats will be restored with effect from April 1. The Commission has also put forward a package of new countermeasures on US exports which will come into force by mid-April following consultation of member states and stakeholders. These countermeasures include many parts used in the manufacture of vessels, including sails for boats, sailboards or land craft.[10]

The US’s increase in tariffs on aluminium and steel imports could have lasting consequences for the UK’s marine industry, however, the UK marine industry will want to carry on trading with their customers and clients in the United States and US firms will want to carry on trading with their UK partners.

Only time will tell how the tariffs will truly affect the UK’s marine industry, but the industry has always demonstrated its adaptability and resilience despite ongoing challenges and no doubt will continue to do so.