The Boat Has Been Rocked: New Tariffs Raise Concerns, Florida Legislative Changes, and Uncertainty in Florida’s Marine Industries
Apr 14, 2025
By: James Guanciale, Esq.
For the past week, the global markets have been rocked by the White House’s April 2nd announcement of universally-applied, 10% tariffs, which went into effect on April 5th. The April 2nd executive order declares that there is a national emergency “arising from conditions reflected in large and persistent annual U.S. goods trade deficits” and invokes the International Emergency Economic Powers Act of 1977, the National Emergencies Act, Trade Act of 1974 section 604, and section 301 of title 3 of the U.S. Code. The executive order espouses that “[i]t is the policy of the United States to rebalance global trade flows” through these tariffs and that the tariffs will continue until the White House determines “that the underlying conditions” giving rise to the executive order “are satisfied, resolved, or mitigated.”
A long list of countries listed in “Annex I” of the executive order, are subject to even higher tariff rates, including major trading partners like the European Union. These heightened rates range from 11% for Cameroon and the Democratic Republic of the Congo to as high as 50% for Lesotho. While some early analyses of the executive order indicated that these Annex I tariffs were in addition to the baseline 10% tariff rate, the Annex I tariff rate will instead replace the universal 10% tariff rate as of April 9th. Since the executive order, the tariffs against China have increased precipitously and, at the time of writing, are as high as 104%, with further developments coming rapidly. In addition to the European Union, many of the world’s largest vessel exporters are listed to Annex I, including China, South Korea, Japan, and India, raising major concerns for American firms importing vessels. While there is an “Annex II” listing many exempted goods, these are primarily raw materials, building and fuel components, informational materials, etc., and Annex II does not spare vessels. Articles imported from countries under Column 2 of the Harmonized Tariff Schedule of the U.S. (i.e., Russia, Belarus, Cuba, and North Korea) are exempted and are, instead, still subject to their usual penalties. For Canada and Mexico, articles which do not fall under the USMCA are subject to tariffs of 25%, aside from energy, energy resources, and potash imported from Canada not falling under the USMCA, which are subject to a 10% tariff rate. Even duty-free de minimis imports will be subject to tariffs once “adequate systems” are in place.
There is a slight silver lining for imported articles which are partially of U.S.-origin. If 20% or more of an article’s value is “U.S. originating,” the tariffs will only apply to value of that article which is not “produced entirely, or substantially transformed in, the United States.” The CBP is authorized, however, to require information and documentation to ascertain and verify whether the article is substantially finished in the U.S. Entities who plan to use this provision of the executive order should ensure that they have and maintain any such documentation.
A word of caution: the executive order reserves the White House’s right to modify these tariffs going forward, particularly in response to any retaliatory tariffs imposed upon the U.S. or due to the continued decline of U.S. manufacturing capacity. Shortly after the executive order, China, as an example, quickly announced such retaliatory tariffs. Therefore, it looks like this highly dynamic situation will only continue to evolve and shift in the coming weeks.
These tariffs also come at a time when Florida, in particular, has several proposed legislative bills which collectively reduce law enforcement’s ability to stop and disrupt vessels while simultaneously proposing to increase penalties for reckless boating and restrict anchoring in high-traffic areas. Therefore, at the same time that the world is facing the instability resulting from the recent tariffs, Florida is also negotiating fundamental changes to how boating regulations are enforced.
Senate Bill 1388, for example, known as the “Boater Freedom Act,” aims to limit law enforcement’s ability to stop and board vessels without probable cause or specific knowledge of a violation of the “Vessel Safety” chapter of the Florida Statutes. No longer would law enforcement be able to stop vessels at will for compliance checks and safety inspections. It would create a “Florida Freedom Boater” decal, effective for somewhere between one and five years, confirming compliance with safety requirements at the time of registration and ostensibly removing the need for safety checks. Governor DeSantis has explained that this Act is, partially, in response to the influx of inexperienced boaters who moved to Florida after 2019 and the resulting increase in vessel stops. While promoting the Act Governor DeSantis has also advocated for transferring the authority to regulate Atlantic red snapper catches exclusively to Florida in order to create expected economic benefits, although the Act does not speak to this issue. At the same time, however, Senate Bill 628, known as “Lucy’s Law,” would increase penalties for reckless boating and mandate safety training, taking a very different approach to the problems created by the recent surge in inexperienced boaters. Meanwhile, House Bill 481 attempts to increase restrictions on anchoring in high-traffic areas. Taken together, this legislative environment adds local uncertainty in the marine industry at a time when the instability of shifting tariffs looms large.
Colodny Fass is always available to consult with you on these rapidly-changing and highly impactful developments, including to discuss strategies such as foreign and off-shore vessel closings to mitigate negative effects. Our firm is keeping a close eye on these state and federal developments and would be happy to discuss their impact on your company. Stay tuned for more information