Increasing Import Tariffs May Soon Impact The Pool industry

Increasing Import Tariffs May Soon IMPACT THE POOL INDUSTRY

BY MARCUS PACKER

A wide ranging increase of import tariffs may impact pricing in the industry soon.

With a change in the White House, the word “tariffs” has sparked unsettling questions, particularly about how a rise in the cost of imported goods could impact industries like pool manufacturing and construction. Tariffs—taxes imposed on goods as they enter a country—are designed to incentivize domestic production by making foreign goods more expensive. While this might benefit certain domestic industries, the broader economic implications remain contentious.

President Trump’s proposal to

impose steep tariffs—including a global tariff of up to 20 percent, a 60 percent tariff on imports from China, and up to 100 percent on imports from Mexico—has sparked heated debate. Both economists and voters alike have been divided over whether these tariffs will rejuvenate American manufacturing or burden the economy with higher costs and inefficiencies.

Proponents of Trump’s tariffs argue that the policy addresses the negative effects of globalization on American manufacturing. Since the implementation of NAFTA

in 1994, the number of U.S. manufacturing jobs has declined from nearly 17 million to around 12 million by 2016. Tariffs, they assert, could reverse this trend by incentivizing domestic production and discouraging outsourcing. As Trump stated during his campaign: “Under my plan, American workers will no longer be worried about losing your jobs to foreign nations, instead, foreign nations will be worried about losing their jobs to America.”

Manufacturing plays a pivotal role in driving innovation.

According to the McKinsey Global Institute, the manufacturing sector accounts for a significant portion of private research spending. Proponents argue that when manufacturing shifts overseas, the associated supply chains, engineering expertise, and feedback loops between design and production are also lost, stifling innovation. For instance, Apple’s attempt to manufacture its high-end Mac Pro in Texas faltered due to a lack of sufficient domestic suppliers, such as screw manufacturers.

Manufacturing and other physical economy sectors, including agriculture and resource extraction, contribute disproportionately to economy-wide productivity growth. These sectors anchor local economies and create jobs that personal services cannot replace. By imposing tariffs, proponents believe the U.S. can preserve economic balance and ensure that trade remains mutually beneficial, rather than a one-sided exchange of cheap goods for financial assets.

The primary criticism of tariffs is that they effectively act as a tax on domestic consumers and businesses. For instance, consider an Intex above-ground pool, a popular low-cost option among consumers. A $1,000 pool imported from China would incur an additional $600 charge under a 60 percent tariff. While this cost is initially paid by the importing company, it is typically passed on to consumers in the form of higher retail prices.

While tariffs benefit protected domestic industries by enabling them to charge higher prices, they do so at the expense of consumers. This redistribution of income can lead to inefficiencies, as protected industries are not always low-cost producers. In the long term, tariffs reduce economic output and lower incomes, as Adam Smith and other classical economists have long argued.

High tariffs on imports from countries like China and Mexico could provoke retaliatory measures, leading to trade wars. Such retaliation would hurt U.S. exporters, potentially negating any benefits gained from the tariffs.

Tariffs can contribute to inflation by raising the cost of imported goods. This effect could lead to an economic downturn unless offset by Federal Reserve actions, such as loosening monetary policy. However, such interventions carry their own risks and trade-offs.

President Trump has announced plans to impose tariffs on imports from countries such as China, Mexico, and Canada upon taking office on January 20, 2025. The pool industry relies on various imported materials and components, including pumps, filters, chemicals, and many other components. The imposition of tariffs can lead to increased costs for these imports, which manufacturers and suppliers may pass on to consumers.

Considering these factors, consumers in the pool industry might begin to notice price increases within 3 to 6 months following enforcement of any new tariffs. This timeline accounts for the administrative implementation period, depletion of pre-tariff inventory, and adjustments within the supply chain.

The proposed tariffs aim to address the shortcomings of globalization and revitalize American manufacturing. By incentivizing domestic production and innovation, tariffs could strengthen the U.S. economy in the long term. However, the immediate costs—higher consumer prices, economic inefficiencies, and the risk of retaliation—pose significant challenges.