What Will a Trump Presidency Mean to the Maritime Industry?
In something that was a bit of a surprise to many, on November 8th, Donald J. Trump was elected the 45th President of the United States. Trump rode a sometimes bitter campaign to a resounding victory, with the promise of job growth and a strongly rebounding economy. But, what will a Trump presidency really mean for the boating industry in general, and for yacht makers and yacht sales specifically?
While neither President-elect Trump, nor his rival Hillary Clinton talked much about the maritime industry specifically out on the campaign trail, a look at his broader policies on trade, taxes, the environment and infrastructure, can give us some insight into how the Trump presidency may impact shipping, boat sales, waterways and ports.
So far the commercial shipping industry is showing some signs of nervousness over Trump’s stance on international trade policies. If he dissolves NAFTA, TPP, and places stiff protectionist tariffs on China and other countries who export goods, as he has suggested, this could have a negative impact on cargo shipping. Also, members of the American fishing and seafood industries fear that his vow to increase drilling and production of fossil fuels, could have a negative impact on the ocean environment.
However, what he actually enacts, still remains to be seen. His talks on trade and tariffs may all be bluster, in order to negotiate better deals that can actually improve our standing in the global economy. His stated goals, remember, are not to destroy trade, but to create a more even balance between the goods America imports, with those we export. If Trump’s policies increase the tonnage of American exports, that can still be good for the commercial maritime industries.
Recreational boating, and the yachting sector, should fair a bit better under a President Trump. As a wealthy business person, Donald Trump is certainly no stranger to yachts and the value of the yachting lifestyle. In fact he once owned one of the Top 10 Superyachts in the world. So, certainly we can expect President Trump to be friendly to yacht makers and the yachting industry. Who knows, he may be the first POTUS in decades to recommission a Presidential Yacht, to replace the USS Sequoia, now wallowing in disrepair!
The National Marine Manufacturers Association (NMMA), along with other groups representing the “outdoor economy,” has already been meeting with the Trump transition team, to ensure their support for policies that will help those industries thrive. For its part, the NMMA wants the incoming administration to be aware of the billions of dollars in economic activity and hundreds of thousands of jobs, that recreational boating represents.
Given some of the things Trump has said, and his recent picks for EPA and DOE, it seems likely a Trump administration will see a relaxation of the ethanol standards, making non-ethanol marine fuel options more readily available, which is good news for boaters who have been very unhappy with the challenges ethanol-laden fuel presents to marine engines.
Taxes and Consumer Confidence
If there is one aspect of a Trump presidency that would seem to bode very well for yacht sales, and the yachting industry, it is what his tax proposals should mean for the economy and consumer confidence.
Let’s look at what Trump’s tax plan will really mean for consumers, the economy, and “purchasing power.” If Trump accomplishes his tax reforms as presented during the campaign, for 2017 tax rates should drop for both C corporations and individuals.
The most significant change proposed, would cut “tax brackets” from the current number of seven, down to three.
- Those making less than $75K would pay 12%.
- Those earning from $75K-$225K would pay 25%.
- Those earning $225K or more would pay a maximum of 33%.
Lower taxes across the board means more cash in the pockets of more individuals and businesses, which will add jobs. More cash and more jobs, means more boat and yacht sales.
It is very likely that high-net worth individuals, entrepreneurs and businesses will thrive, and enjoy a comfortable level of success under the incoming administration. The more that people are successful, the harder they are working, and the more they are earning, the more they are likely to want to take some down time, and enjoy the finer things that success brings, such as a charter yacht vacation, and for some, the ultimate personal reward of luxury yacht ownership!
It’s not always easy to stay on top of what’s new in motor yachts. If you would like to benefit from our expertise in these areas, or if you have any questions or comments about this blog post, do not hesitate to contact our Sales Specialists, or call us at 954-900-9988.