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Old 08-01-2018, 06:03 AM   #1
HogHunter34
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Default Economic impact of Tariffs

Saw a recent local news clip on how tariffs have led to increased cost of raw materials & impacting many business areas such as home construction & many steel and aluminum based companies. Even Coca Cola claiming the need to raise price due to increased price on raw materials. The Dow market certainly responded negatively during all the tariffs talk but seems to be recovering now. Hiring is still strong with low unemployment. In general observation there seems to be a lot of construction activity. Any business owners noticing the impact or others seeing the impact ?
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Old 08-01-2018, 06:54 AM   #2
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My initial feelings are that that is a BS cop out out reason for raising prices. Coca Cola pays between $0.01 and $0.02 per can...it is pretty easy math to do to see how much a 10% tariff raises the cost of a coke but I am betting that is NOT the amount they will go up! I would gladly pay a penny more per 12 pack to get our country headed in the right direction but it seems like I a constantly being asked for more money and things are getting worse instead of better and I am funding things I do not support!

I do understand material cost increases will have to be passed along to the consumer but it seems like what usually gets passed along is way more than just the tariff price.

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Old 08-01-2018, 07:11 AM   #3
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My initial feelings are that that is a BS cop out out reason for raising prices. Coca Cola pays between $0.01 and $0.02 per can...it is pretty easy math to do to see how much a 10% tariff raises the cost of a coke but I am betting that is NOT the amount they will go up! I would gladly pay a penny more per 12 pack to get our country headed in the right direction but it seems like I a constantly being asked for more money and things are getting worse instead of better and I am funding things I do not support!

I do understand material cost increases will have to be passed along to the consumer but it seems like what usually gets passed along is way more than just the tariff price.
There is always more than the extra cost of the tariff passed along. There is the cost of more tax professionals to make sure the company is on the up and up. Then there are health benefits for those new people. There are advisers who get hired to determine where the best place to get aluminum will be in the future. The company will have to hire more people to maintain company records. Companies will hire people to make sure less aluminum goes to waste. There are new federal employees hired to make sure companies are complying. Those people need to have supervisors and benefits too.

That is why people don't like the idea of adding tariff's.
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Old 08-01-2018, 07:29 AM   #4
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We deal in construction/oilfield equipment and some of the companies we represent have started raising prices.
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Old 08-01-2018, 10:28 AM   #5
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My china factory just lost a 1.4 million(USD) contract from us because of the Tarriffs last week. China is feeling the heat.
They tried to hit us in soybeans only to see the EU pick up that business. Now they are relying on Brazil to supply them...and Brazil doesn't have enough.
This is exactly how all this should work when you are being taken advantage of.
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Old 08-01-2018, 12:18 PM   #6
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Lot of folks around here are taking it on the chin. The last few years have been bad for agriculture and this tariff deal will probably put some guys out. Bad deal.
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Old 08-01-2018, 03:39 PM   #7
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Prices are up but so is business, so not hurting us, probably be our best year!
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Old 08-01-2018, 04:43 PM   #8
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I work in the fabrication business, mostly highway products like control cabinets, signal light and solar panel hardware, etc., and about 90% aluminum.
Before the tariff, our cost for aluminum was around $1.40/pound. We are now paying around $2.50/pound. Speculators and middlemen turned a 10% tariff into a 70% price increase.

Since the tariff, our sales have dropped by half. Many long term State highway contracts contain a clause that provides for reimbursement if material costs increase more than 15%. More money being spent that was not budgeted for has all but halted new orders.

I understand what Trump is aiming to accomplish, and something needed to be done, but it sure is hurting a lot of manufacturers right now that depend on raw aluminum and steel.
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Old 08-01-2018, 10:58 PM   #9
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There is one positive about tariff's in my opinion. The people that make money but don't pay taxes. Drug dealers, people that live on a cash basis. (immigrants), and the rest of us are all going to pay more for stuff. But the people that don't pay income tax, but still buy stuff - will be contributing to our taxes in the form of tariffs and higher prices for stuff. in time we might see even more money going to the government.. This would be good IF the government used the money to pay down the national debt. One can hope anyway...
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Old 08-01-2018, 11:32 PM   #10
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Quote:
Originally Posted by Cantcatch5 View Post
My initial feelings are that that is a BS cop out out reason for raising prices. Coca Cola pays between $0.01 and $0.02 per can...it is pretty easy math to do to see how much a 10% tariff raises the cost of a coke but I am betting that is NOT the amount they will go up! I would gladly pay a penny more per 12 pack to get our country headed in the right direction but it seems like I a constantly being asked for more money and things are getting worse instead of better and I am funding things I do not support!

I do understand material cost increases will have to be passed along to the consumer but it seems like what usually gets passed along is way more than just the tariff price.


It seems when prices go up because of fuel or other goods they never go back from when the prices level back out. I know the company I work for raised delivery charges when gas was around $4.00 and they never went back down when gas went to under $2.00.


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Old 08-02-2018, 06:44 AM   #11
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I've been waiting for a few Grizzly tools to come into stock, to order ... most of them are made in China. One of the ones on my list was hit with a 25% price increase due to the tariffs. I'll be shopping other brands to see if it's still worth the wait to get the Grizzly vs Jet or Delta.
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Old 08-03-2018, 08:19 AM   #12
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It seems when prices go up because of fuel or other goods they never go back from when the prices level back out. I know the company I work for raised delivery charges when gas was around $4.00 and they never went back down when gas went to under $2.00.


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I have noticed that as well!
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Old 08-06-2018, 09:47 AM   #13
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Free Market...hummmm


https://www.nytimes.com/2018/08/05/u...T.nav=top-news
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Old 10-11-2018, 08:51 PM   #14
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https://www.dtnpf.com/agriculture/we...GPQLU.facebook
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Old 10-12-2018, 08:16 AM   #15
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The new tariffs cause me to bust my materials budget and also to bust on my major equipment budget, but we are making money still and signing new projects. Our contracts moving forward will all have rhetoric specific to tariffs to help buffer a scenario like this. We had a contract signed but engineering took 1.5yrs to complete. This tariff hit right before we bought equipment and materials. Bad luck on our timing. On the bright side of moves this admin has made, the tax law passed allowed for a profit sharing bonus for our employees as well as an upgrade in healthcare service.
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Old 10-12-2018, 08:54 AM   #16
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Most of my material cost have gone up. I've raised our pricing accordingly. Sales are up substantially.
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Old 10-12-2018, 09:05 AM   #17
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Unfortunately I think people will respond to this thread from a bias point of view (supporting Trump). However a lot of these tariffs have negatively impacted consumers. I will use something very simplistic as an example. Steel prices. Trailers have gone up substantially since the steel tariffs have been in place. So for example, trailers. Trailer prices have gone up 30-40 percent in the last year, and they're suppose to continue to rise. The trailer manufactures and distributors are not making more money with the increased prices. In fact, trailer manufactures and distributors are making less money because sales are down due to increased cost. So in this scenario, the tariffs are impacting consumers AND businesses in a negative way. This is just one very simple example.


Now with that being said, I work in construction. Construction is fantastic in the DFW area, so our business is thriving. These tariffs have caused ALL material to go up, and we aren't making anymore money off of it. Hard to deny that some of the policies that the Trump administration has introduced have worked, but these tariffs do not seem to be one of them.

Last edited by Arrowthreat; 10-12-2018 at 09:09 AM.
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Old 10-12-2018, 09:11 AM   #18
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Standby Arrowthreat...I think we are very well positioned at the moment.

Last edited by Man; 10-12-2018 at 09:20 AM.
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Old 10-12-2018, 09:14 AM   #19
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Hard to deny that some of the policies that the Trump administration has introduced have worked, but these tariffs do not seem to be one of them.
I disagree.
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Old 10-12-2018, 09:31 AM   #20
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so our business is thriving............ and we aren't making anymore money off of it.
You are doing something wrong then. Very wrong.

I work in construction as well. Our margins are down (I would argue more Harvey related than Trump) but sales and revenue is up.
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Old 10-12-2018, 10:05 AM   #21
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^^^Our margins up, Gross and Net revenue is up as well as income. 80% of my business is tied to commercial interior finish out work.
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Old 10-12-2018, 11:27 AM   #22
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Originally Posted by Arrowthreat View Post
Unfortunately I think people will respond to this thread from a bias point of view (supporting Trump). However a lot of these tariffs have negatively impacted consumers. I will use something very simplistic as an example. Steel prices. Trailers have gone up substantially since the steel tariffs have been in place. So for example, trailers. Trailer prices have gone up 30-40 percent in the last year, and they're suppose to continue to rise. The trailer manufactures and distributors are not making more money with the increased prices. In fact, trailer manufactures and distributors are making less money because sales are down due to increased cost. So in this scenario, the tariffs are impacting consumers AND businesses in a negative way. This is just one very simple example.


Now with that being said, I work in construction. Construction is fantastic in the DFW area, so our business is thriving. These tariffs have caused ALL material to go up, and we aren't making anymore money off of it. Hard to deny that some of the policies that the Trump administration has introduced have worked, but these tariffs do not seem to be one of them.
...so the cost of a steel trailer is up 30-40%... Well it ain't tariff's that made it go up that much... I sell millions of dollars in stainless steel products, and my actual landed costs have increased about 12%... I guess I should have bumped my pricing by the 30-40% huh?

Yes, costs have risen and partially because of tariffs, but in reality from what I have seen in the industries and markets I participate in, tariff's are just an excuse to raise prices... some of my competitors not only raised prices, but ADDED a sur-charge to their projects...

I wish there were no tariffs, but in the long run, I look forward to the day I can use domestic materials to get my projects done and I indeed support the president/administration in this effort.
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Old 10-12-2018, 01:56 PM   #23
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Quote:
Originally Posted by SaltwaterSlick View Post
...so the cost of a steel trailer is up 30-40%... Well it ain't tariff's that made it go up that much... I sell millions of dollars in stainless steel products, and my actual landed costs have increased about 12%... I guess I should have bumped my pricing by the 30-40% huh?

Yes, costs have risen and partially because of tariffs, but in reality from what I have seen in the industries and markets I participate in, tariff's are just an excuse to raise prices... some of my competitors not only raised prices, but ADDED a sur-charge to their projects...

I wish there were no tariffs, but in the long run, I look forward to the day I can use domestic materials to get my projects done and I indeed support the president/administration in this effort.

I am in a similar boat, as a large portion of my business is engineered and fabricated reinforcing steel for industrial and commercial construction projects. The vast majority of steel that we fabricate is foreign bar. The import tariffs left the market in the hands of the domestic mills, and they did raise prices because they knew they had the room, but it has by no means been outrageous or to the extent that it could have been. Outside of the DOT work, government projects, and the occasional "just cuz", we fab more import bar by far than we do domestic. Now we do not play much in the DOT work, because the large domestic mills will fabricate and provide bar to these large jobs themselves. But as you said, i too look forward to being able use domestic products knowing that we will be putting back into our economy. Most people complaining about the tariffs are failing to see the big picture. it is 100% best case scenario for America to be self sustainable in all aspects!!

That said, we have not seen a slow up in the construction world at all. Industrial projects are still booming, highways are still being built and rehab'd, and the general commercial construction is booming right along. Of course that is different from region to region, but along the Gulf Coast it is rocking!
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Old 10-12-2018, 02:26 PM   #24
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The tariffs are at least an attempt to quit getting run over by other countries. Other countries dumping cheap commodities into our country have closed more businesses and put more folks out of work than the tariffs will. The tariffs are short term until things get more in balance.
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Old 10-12-2018, 02:44 PM   #25
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I for one, agree with the China tariffs (not so much with the tariffs on our allies), simply on the basis of China's theft of our IP. He needs to tax everything they put out until they reform their IP laws, and their government stops assisting their companies with the thefts. That is the real threat to our economy. We'll never compete with their cheap means of production, but we've always had better technology. They're closing that gap through theft.
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Old 10-12-2018, 06:24 PM   #26
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If there is a demand there will be a away the get the supply to meet it. Given time the markets will go around the tariffs, sell trough a different county, etc., and get around the "direct tariffs". And we USA will be in a better position than before.
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