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Steel tariffs and new tool prices

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#1 · (Edited by Moderator)
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!
 
#3 ·
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.
 
#6 ·
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!
 
#9 ·
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!
 
#10 ·
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.
 
#12 ·
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…
 
#15 ·
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
 
#17 ·
somebody afraid of a little political banter - you know it ain t me !

- Jimbo4
It isn't me that's afraid, it's the people setting the prices.

As I said, I work in a steel shop, and our suppliers for raw goods are already raising their prices and citing his talk about tariffs as the reason. Regardless of whether I think Trump is full of hot air or not, the bottom line is already rising.

Is he talking trash as a negotiating tactic? Doesn't matter at this point. The results are already showing.
 
#18 ·
It's probably going to make anything made here more expensive and at the same time make things made abroad cheaper. Retaliation might make whiskey cheaper here though so you won't care.
 
#19 ·
But that aside, it would have a bigger effect on tools and a here with steel from abroad than tools made abroad and imported.
This is one of the funny/horrible things about these tariffs. Domestic firms that use steel and aluminum will suffer, as will domestic consumers; and foreign firms that use these raw materials will benefit.

But eventually prices of foreign-made metal products will go up as consumers substitute away from more expensive domestic products. Everything will become more expensive.
 
#21 ·
I've been looking at this issue at work.
I expect that bulk steel and fabricated steel (i.e. Structural steel) will get the tarriff. I don't expect machines (or other items) that include steel in their manufacture will get the tarriff. Same with aluminum.
There is more explanation about import code classification and "significant transformation" that are the basis of my expectations, but if I spend time writing about that, this will start to feel like work…
 
#24 ·
JMHO and nothing else insinuated.
No country wants it. Trump is a negotiator, i see it as just that, a tool. larry

- ohtimberwolf
The following is just an ambulatory, aimless rant that isn't directed at you but a general everyone who thinks this idea of producing raw goods in America again is the greatest idea since the wheel and will bring the country a golden age of innovation and opportunity.

His negotiating is already eating into my pocket and will soon be in yours. If this is the best he can do he can stuff it.

Besides, when was working in a steel mill for minuscule wages a job we wanted all of our children to aspire to? There's a reason those jobs ended up overseas. Not sure where everybody got the idea that being a knuckle-dragger was the new American Dream. As long as we've got the ability to make enough of a profit developing and selling new tech to other countries that allows us to afford buying everything abroad there is no reason for us to covet those bottom-rung jobs.

It's not like there aren't quality products coming from abroad. Taiwan and Hong Kong have fab shops and factories that match or exceed anything we can do (now if only those factories were producing woodworking tools) because they got their act together. The problem with the C word that everyone seems to despise isn't that they produce crap, it's that everyone keeps buying it because they're obsessed with buying cheap.

If people stopped buying the crappiest possible product China is capable of producing, they'd stop making it and step their game up just like Taiwan did.

And if what they make isn't good enough, get it from Germany, Switzerland, or Austria. They've always been a step ahead of us in manufacturing anyways.

Guess who is the world's second largest importer of steel? Give you a hint, it's one of the three I've just listed. If they can import the majority of their materials and still be a world leader in manufacturing, why are we trying to produce our own materials instead of trying to match or exceed their quality?

Though with education going the way it is in this country, many of our children will be lucky to qualify for a job in a steel mill running a forklift. Maybe we should be aspiring to put them to work doing the jobs that used to be delegated to struggling communist nations at this rate. It's all they have to look forward to.
 
#25 ·
Not certain where anyone got the idea that working in a steel mill means being a knuckle dragger.

I was in a mill recently and the operator were sitting a computer terminals monitoring a sophisticated control system. And these guys and gals were making very good money. I had conversations with several of them and they were very sharp. Are parts of it hot and dirty…of course.

The quality level of the steel being produced was as good as anything being made overseas.

Maybe, you would call me a knuckle dragger for the 40 years I spent in steelmaking. But, I have advanced engineering degree and made a good wage. I also saw first hand steelmaking around the world so have a pretty good perspective of the quality and technology. I would not mind a bit if one if my kids worked in a steel mill.
 
#26 · (Edited by Moderator)
As a kid growing up not far from mills in Lackawanna NY in the 1960's (where the air choked you and the lake was toxic) I say good riddance to steel production in this country. Lot's of jobs our parents did that they knew would kill them but they had families to feed so they did them anyway (ahem - coal mining?). I agree that bringing back jobs that are mind numbing and downright unhealthy for the employee and the environment isn't the answer. The guy in the corner office or the White House could care less as long as his stock or favorability numbers are up.
 
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