Manufacturers prepare for potential April 2 tariff start date
Weeks into his second term, President Donald Trump has announced and enacted a variety of tariffs on key U.S. trading partners. The original tariffs — 25% on goods from Canada and Mexico and an additional 10% on imports from China — have been delayed or modified, creating more uncertainty for the hot tub industry.
“We had hints [about tariffs] throughout the entire campaign and he’s following through,” says Justin Wiley, vice president of government relations, standards and codes at The Pool & Hot Tub Alliance. “We’re not pro-tariff; we’re not anti-tariff. Our position is to make sure that our members are aware and we’re collecting information on the potential impacts.”
A tariff is a tax on products imported from other countries; the company importing the product pays a tax percentage based on the cost of the product. For example, if a hot tub worth $10,000 is imported from Mexico, the company importing the hot tub would pay a $2,500 tax to get it across the border into the U.S.
“Overall, tariffs are likely to have a negative impact on the hot tub and sauna industry,” says Mark Boulding, vice president of marketing and growth at Leisurecraft, a Canadian manufacturer of saunas, hot tubs and other backyard products. “Rising costs for raw materials and imported components will increase manufacturing expenses, potentially leading to higher prices for consumers. This could slow demand, particularly for imported products, and create market uncertainty for both manufacturers and dealers.”
Boulding says his company could see both positive and negative impacts. Since his company can boast that its products are 100% Canadian-made, it could see a boost in domestic customers as they prioritize buying locally. The tariffs also won’t impact its non-U.S. international customers. Negatively, its costs for products entering the U.S. will rise, and they may lose market share to American-made sauna companies.
“Most people don’t realize how diversified our supply chain is,” says Steve Stigers, executive vice president of Watkins Wellness. Stigers says most of the wood used to make their frames is from Canada, as well as their spa siding.
Unless a company has found a proprietary source, almost all spa electronics come from Gecko or Balboa, companies with factories in Mexico. Other products like jet pumps and heaters typically come from China.
“Many of the input materials and components used in the production of hot tubs and swim spas are sourced from outside of the United States, with particularly strong supply bases in Canada, Mexico and China,” Stigers says. “It could have a very significant inflationary impact on our industry, which is the worst thing that could happen after four years of elevated inflation.”
Silk Water Solutions, maker of SilkBalance, operates as two distinct entities: Silk Water Solutions USA and Silk Water Solutions Canada, each serving its market, manufacturing locally in each country and supporting jobs and economies, explains Susan McPhie, director of global sales and marketing and general manager. McPhie says they’ve been proactively preparing for potential tariffs since Trump’s reelection.
“A key part of our strategy was implementing a proactive mitigation plan well in advance, securing pre-tariff inventory where needed in key markets to cushion against cost fluctuations,” McPhie says. “Open communication with our customers and vendors is essential. We are committed to providing support during economic uncertainty. By strategically managing inventory, optimizing our supply chain and improving operational efficiencies, we aim to maintain market stability while counteracting cost pressures. This approach keeps us agile and focused on delivering exceptional products and value to dealers and customers worldwide.”
Likewise, Boulding says Leisurecraft is working closely with its dealers to provide updates, support and strategic marketing and pricing solutions to minimize the impact on sales.
“Leisurecraft’s saunas are fully manufactured in Canada and our production remains stable,” Boulding says. “However, the tariffs on U.S. imports may create short-term challenges as they increase pricing for our American dealers and customers. We remain proactive in navigating these constant changes and will continue to work with our dealers to communicate and support.”
The tariffs on Mexico and Canada were announced in February and supposed to go into effect that month but were delayed for 30 days following both countries’ promises to increase border security. After the delay, the tariffs went into effect March 4, only for another delay to be announced days later, with the new start date being April 2.
“We’re hyperfocused on tariffs and the impact they will have on the industry,” Wiley says. “We’re going to work our connections on [Capitol Hill] to let [lawmakers] know the impact that it’s having on our manufacturers and to hopefully mitigate that. We’re here.”
Exceptions on tariffs imposed during the last Trump administration were granted in many circumstances. This time automakers were given a one-month reprieve before the tariffs were again delayed until April.
“If we’re looking back to 2018, there will be a process where exemptions will be accepted, analyzed and then they’ll potentially grant them for supply chain items that are not manufactured in the U.S., although there is no guarantee,” Wiley says.
For now, the effects are likely to be felt across the industry, Stigers says.
“Whether you’re a U.S.-, Mexico- or Canada-based hot tub manufacturer, these tariffs are going to impact everyone due to the nature of our global supply chain,” Stigers says.
Some hot tub manufacturers announced price increases, though they may be paused until the new April deadline.
“Because so much is unknown, we should always remember wellness is universal, and our shared goal is to support all customers in achieving health through water,” McPhie says. “No matter where they are, our commitment remains the same: delivering exceptional value and products that enhance their well-being.”
The PHTA continually is updating tariff information and impacts on its website.