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(closed) Steel tariffs and new tool prices

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Forum topic by Charliefreak posted 03-02-2018 07:38 PM 3945 views 0 times favorited 87 replies Add to Favorites Watch
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Charliefreak

17 posts in 393 days


03-02-2018 07:38 PM

First off, let me be clear that this post is not intended to start a political discussion. Please don’t comment on whether you think steel / aluminum tariffs are a good idea for the USA or not!

My question is, I have a number of quite pricey new tool purchases planned in the next six months or so (new table saw, band saw, jointer). All USA-available tools seem to be either manufactured in the far east and imported, or are manufactured in the US using raw materials imported from the far east. Either way, I am worried that the 25% steel tariffs might mean significant price hikes on these tools in the near future.

Does anyone know enough about how the stationary tool business works to know whether this tariff is likely to impact prices from e.g. Grizzly, Sawstop, Rikon etc. And does anyone know how quickly this might happen?

Thanks!


87 replies so far

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Loren

10477 posts in 3847 days


#1 posted 03-02-2018 07:45 PM

Machinery prices have gone up before due
to increased steel costs. I remember reading
about it in an industry journal several years
ago.

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BoardButcherer

144 posts in 294 days


#2 posted 03-02-2018 08:43 PM

Already saw an 8% increase in raw steel prices at my workplace this year and we’re anticipating another 5-6% by June.

The thing is raw materials aren’t what’s pricey about tools, and the tarriff mostly effects raw goods such as ingots, beams, piping, tubing, etc….

Also you’re not likely to see the full “25%” as a consumer. Canada and Mexico make a lot of steel for us, and an increase in their volume will see their prices come down to be competitive and eventually cheaper than China.

But more importantly certain Golden Maned individuals are going to get their backside handed to them in the international trade arena before a 25% tarriff becomes final. Raw materials have gone up 12% this year and in some cases will be 20% by the end of the second quarter just because of people talking about a tarriff. There are a lot of people with pockets just as deep as his who are putting pressure on Washington right now to see that this train doesn’t continue to go off the rails.

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Fresch

359 posts in 2120 days


#3 posted 03-02-2018 08:56 PM

See if you can preorder to lock in the price.

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Charliefreak

17 posts in 393 days


#4 posted 03-02-2018 09:00 PM

Thanks guys. I guess the actual raw material cost of the steel in e.g. a bandsaw isn’t that big a chunk of the price.

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CaptainKlutz

601 posts in 1694 days


#5 posted 03-04-2018 11:19 AM

Relax.

Changes to list prices of machine tools based on raw materials is actually a slow process, supply chain for machine tool is at least 2-3 months long. Complex machine tool supply chain can be 6-9 months long (or longer when demand exceeds supply). Another factor to consider is all tools have a retail markup that is large enough to absorb small changes in material costs (as costs are ALWAYS going up).

So you have a few months before wood working tool mfg actually need to react, and start blaming tariffs for price increases. :(

FWIW
Companies like Grizzly with fancy color catalog that clearly states “prices good till XX/XX/XXXX DATE” on catalog, must issue a new catalog that supersedes the old one to change prices, or they can be subject to unfair price advertising legal claims.
Changing prices is little easier for tool manufacturers that commonly sell through dealers (Rikon), as they publish a catalog without prices, and then typically publish a new retail price list as needed (monthly/quarterly/annual). Printing a new price list is easier than an entire 300+ page catalog. :)

Every company is different. Only time will tell if increases in market price of steel due tariff is enough to require price increases this year. Can not forget that US corporate tax rate was significantly reduced for 2018, which increased profits and might counteract the impact of raw material prices?
Plus, when you add the political aspect of the how the new tariff was created, I would suggest that price increases based on steel costs will be slow to reach consumer, and likely will be administered during normal annual new catalog releases?

BTW – Enjoy your cool new tools, and thanks for spending money that keeps economy running!

-- I'm an engineer not a woodworker, but I can randomly find useful tools and furniture inside a pile of lumber!

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woodworm1962

145 posts in 300 days


#6 posted 03-04-2018 12:48 PM

Well if the tariffs are for STEEL that wont effect goods made over in China. I do not know what they make tools out of over there BUT IT AINT STEEL!

-- No one likes the truth...

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woodbutcherbynight

5688 posts in 2608 days


#7 posted 03-04-2018 03:44 PM



Well if the tariffs are for STEEL that wont effect goods made over in China. I do not know what they make tools out of over there BUT IT AINT STEEL!

- woodworm1962

LOL

-- Live to tell the stories, they sound better that way.

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woodworm1962

145 posts in 300 days


#8 posted 03-04-2018 03:54 PM

I had a welder as a freind back in Evansville IN! They were part of a group tha tgot a contract for fabricating and installing COAL shoots fro power companies there. HUGE SILO looking things and at the bottom was a cone like funnel. They were manufactured over in china Then shipped here then in stalled by them

I was looking out back and these huge 2 inch steel cones were out there being hammers cut belt welded…

I ask my buddy what up with those. he said NONE of the parts to mounting and installing these were near the right location and had to be cu off and re welded in the Proper location. HE grabbed a piece of waste laying and the ground and it was CRUMBLY!

He said, “I don’t know what this material is but is it not any steel I can identify.” he said it was also slightly radioactive!!!!

Seem when they make steel over there they toss in anything of any type of metal they got laying around.

One would think at leas ta few of these political Prisoners would have more pride in their work!

I would like to get as Geiger (sp) Counter and run it over my tools someday!

-- No one likes the truth...

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corelz125

565 posts in 1175 days


#9 posted 03-04-2018 05:05 PM

woodworm, I am a structural steel welder and like your friend mentioned I have come across steel that came from “cheaper fab shops” and while welding you will hit parts of the steel that wiil just turn into liquid and drips right out of the weld. I haven’t come across that problem with canadian steel which we use a lot of. I have heard in China they take anything they find thats metal and melt it. throw in the empty beer cans, an old wok whatever is laying around.

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corelz125

565 posts in 1175 days


#10 posted 03-08-2018 10:47 PM

Forget the price of tools going up the price of beer will go up now also

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Jimintomahawak

73 posts in 675 days


#11 posted 03-09-2018 02:15 AM

When demand is high like it is right now prices will go up. Machine Tool sales are crazy right now some lathes and grinder deliveries are out a year. The economy is building up a head of steam. If it were me I would try to lock in prices as soon as you can. On the other hand locking in delivery may be more critical.

Our neighbors across the Pacific always face raw material issues. The gov there controls output. News from there says they are cracking down on foundries creating part shortages for castings.

Time will tell…

-- Laziness drives creative thinking...

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splintergroup

2422 posts in 1422 days


#12 posted 03-09-2018 04:23 PM


One would think at leas ta few of these political Prisoners would have more pride in their work!

- woodworm1962

I think they literally are “in their work”

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BoardButcherer

144 posts in 294 days


#13 posted 03-09-2018 05:17 PM

Tools that likely will see a big increase are Made in the US hand tools.

Trying to collect as many Klein and snap-on/Mac odds and ends as I can at a reasonable price. By this time next year I don’t expect anything about them is going to be reasonable.

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bbasiaga

1240 posts in 2194 days


#14 posted 03-09-2018 08:01 PM

This tarrif talk is really more of a negotiating strategy anyway. It’s a strategy I’ve seen many times in corporate America. “I am going to say something that I know will tick you off. I have little to no expectation it will really happen, but I know by saying it you will start to talk to me. “

But that aside, it would have a bigger effect on tools and a here with steel from abroad than tools made abroad and imported. The way I have heard the tarriffs reported, it is about making the raw materials industry in the US competitive. Only time will tell if it expands beyond that.

Brian

-- Part of engineering is to know when to put your calculator down and pick up your tools.

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JollyGreen67

1676 posts in 2962 days


#15 posted 03-09-2018 11:42 PM

somebody afraid of a little political banter – you know it ain’t me !

-- When I was a kid I wanted to be older . . . . . this CRAP is not what I expected ! RIP 09/08/2018

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