TRUMP TARIFFS

[GITERDUN]

I did some research on the Tariffs Trump is putting on the Chinese- looks like it covers most all CNC and manual mills and lathes- Going up from around 4.7% to 25%, so I guess we can expect some hefty price increases coming down the road on just about all the machines on this forum. Anyone else have info ?





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[RussMachine]

TORMACH already sent me a notice of their price increases.
And I'm still debating the 15L Slant Lathe.

[Jim Dawson]

I'm going to offer a theory here. I suspect that the tariffs are not going to last that long, I suspect Trump is using this as a bargaining chip for trade concessions in the not too distant future. He is not an idiot (I hope), and knows that the price increases due to the tariffs are going to adversely affect the US economy. Now it's just a game of chicken with our trading partners and somebody will blink, I just hope it's not us. I understand it is much more complex than I propose here, but I think this boils it down to the bottom line.

If you need a machine right now, it might be a good time to buy to get pre-tariff pricing, or plan longer term and wait for the storm to blow over. I hope I'm right.

On the other hand, I'm not sure that the tariffs apply to Taiwan goods, but I could be wrong here.

[SCzEngrgGroup]

He is not an idiot...

Believing that requires ignoring the literal mountains of evidence, over decades, to the contrary. China is digging in with both heels, and has absolutely NO intention of caving to his (as yet totally unspecified) demands. China has said as much consistently and repeatedly. You can expect things to get MUCH worse before they get better...

Regards,
Ray L.

[popspipes]

If it puts most of our people back to work, I am for it! We all like the cheaper prices due to imports but then the businesses relocate to the cheaper labor countries. Just have to wait and see how it works out......

[instructor37]

It's definitely a bargaining chip used by Trump to get Chinese tariffs reduced on US made goods- hard to say if a compromise will be reached quickly. All in all the USA is in the strongest position, as China's economy depends on our buying 60% of their goods. Most major Chinese factories are already heavily subsidized by the government to keep the export engine running. It's very possible that the central government will further subsidize these factories so that they can reduce prices and negate the tariff. This would require the use of their US dollar reserves, which would effectively devalue their currency, which would actually reduce the price of Chinese imports. So, maybe in the long run we don't see a big change in prices across the board and we see a drop in the trade deficit- pretty clever strategy if it works. However, for small factories that supply the hobby CNC industry, most likely they will not get big subsidies and prices of Tormachs and others will rise.

Just curious how much Tormach has raised their prices.

[cyclestart]

All in all the USA is in the strongest position, as China's economy depends on our buying 60% of their goods.

The Asian consumer market keeps growing give or take the occasional hiccup, if 60% is today's number it won't be the future number. That's no knock on America, growing markets should be an export opportunity ?

t's very possible that the central government will further subsidize these factories so that they can reduce prices and negate the tariff

Could be, it's not fair trade practice but subsidies are common and not only in China.

[daniellyall]

China could call in the US debt they own then you are up a creek

[Zetopan]

Historically there are *very* few winners, if any, in trade wars.
https://www.nytimes.com/2018/03/08/b...rade-wars.html
https://www.economist.com/finance-an...rica-trade-war
https://www.bloomberg.com/news/artic...ers-and-losers

It is also rather important to recall that Trump has declared bankruptcy 6 times, even his casinos failed. Trump's goal is to isolate the US from the rest of the world.
https://www.washingtonpost.com/polit...r-or-six-times

[snowshooze]

Well, I never believed that hype they drove down our throats on Tarriff's growing up in school.
Everyone else put them on our stuff anyway, and it worked out fine for them.
The amount of money we expatriate is insane.

[A_Camera]

You voted for him, he is your president and he is just doing what he is elected for. That should be good and every American should be happy with him because he said he will "Make America great again" and that's exactly what he is doing, at least he thinks so. The consequences come with the benefits, because only idiots believe in possibilities of cherry picking for free. He is one of the first politician who just does what was asked to do by his people, the voters. I think his actions are no surprise at all, what is surprising people is that he actually does what he promised he will do.

Look at it from the bright side. In any democratic state there is an election period, and after that a new president will get a chance.

He is no surprise at all, he is open as a book and have always been that. What surprising is that people are unhappy with him and his decisions and that people act like if this was news to them. What were these people thinking when he was running for the office?

[A_Camera]

Historically there are *very* few winners, if any, in trade wars.
https://www.nytimes.com/2018/03/08/b...rade-wars.html
https://www.economist.com/finance-an...rica-trade-war
https://www.bloomberg.com/news/artic...ers-and-losers

It is also rather important to recall that Trump has declared bankruptcy 6 times, even his casinos failed. Trump's goal is to isolate the US from the rest of the world.
https://www.washingtonpost.com/polit...r-or-six-times

I think he runs USA as if it was his family business, but he was elected to do just that. In a family business you can take chances, risk the company, or declare bankruptcy and start over again if you fail. Unfortunately, in politics it is not that easy. But this was no surprise, every speech I heard during the campaign reflected that, so that was very clear from the beginning.

Yes, it will be difficult for future presidents to restore the trust the world once had for USA. He manages to destroy the trust many generations of presidents built up, regardless of which party they represented.

[jwatte]

China could call in the US debt they own then you are up a creek

What does "call in the debt" really mean? It's denominated in US dollars. We can print more US dollars to cover the debt, no problem!
We can only do that once, though; people won't fall for the same trick twice. Those who believe in a strong dollar, believe that that's enough deterrent that we won't actually do it.
At the point where foreign trade is denominated in a currency other than the dollar, we know we've lost and there's no coming back. People are in wild disagreement on whether that's "about to happen soon" or "not a realistic risk."

[cyclestart]

Novakon describes their machines as "CNC mills assembled in the USA with US and foreign parts" my guess is the foreign content is the majority of the machine.
This market segment is imports and 25% or less tariffs aren't likely to change that imo. Tariffs end up being a sales tax under another name.
This might effect Tormach's ability to compete for international customers unless there are ways to rebate buyers outside the US.

[SCzEngrgGroup]

Novakon describes their machines as "CNC mills assembled in the USA with US and foreign parts" my guess is the foreign content is the majority of the machine.
This market segment is imports and 25% or less tariffs aren't likely to change that imo. Tariffs end up being a sales tax under another name.
This might effect Tormach's ability to compete for international customers unless there are ways to rebate buyers outside the US.

For Novakon, the basic machine hardware comes from China, with NO motors or electronics. The motors, and all electronics are installed, to customer orders, in their US warehouse. Every machine is completed, and tested, in the US, using a mix of components from US and foreign suppliers who, themselves source from many countries.

Tormach machines, are shipped, completely assembled and tested, from China, electronics and all, and shipped to the customer exactly as they were when they passed through US customs.

The "foreign content" of nearly all hobby-level CNC machines, and many commercial machines, is near 100%, and I'd guess even many/most large commercial machines have their castings made in Asia.

In fact, there are precious few "100% American" "high-tech" products of ANY kind. Virtually all electronic components are sourced world-wide, largelty from China, Taiwan and Korea. Many "American" cars are manufactured in other countries, and shipped to the US, while many "foreign" cars (Honda, Toyota, VW, BMW, etc.) are buy in the US, and shipped overseas. The largest BMW factory in the entire world is located in South Carolina, and 2/3 of its output is exported! One of the cars with the largest percentage of "American" content is a Hyundai! That's why a trade war in this day and age is a completely stupid concept - it hurts EVERYONE, both foreign and domestic. The ENTIRE world is now one giant, inter-connected global supply chain.

Regards,
Ray L.

[instructor37]

Novakon describes their machines as "CNC mills assembled in the USA with US and foreign parts" my guess is the foreign content is the majority of the machine.
This market segment is imports and 25% or less tariffs aren't likely to change that imo. Tariffs end up being a sales tax under another name.
This might effect Tormach's ability to compete for international customers unless there are ways to rebate buyers outside the US.

Reading the list that was posted, it shows both manual and CNC machines, so importing a manual one and converting it does not avoid the machine tariff.

[Zetopan]

The ENTIRE world is now one giant, inter-connected global supply chain.

No need to worry, Trump is "fixing" that "problem".

[Zetopan]

The ENTIRE world is now one giant, inter-connected global supply chain.

No need to worry, Trump is "fixing" that "problem" (at least for the USA).