some in our industry announced an 8% surcharge this morning. It will be interesting to see where this goes but it's going to be war and it will get ugly

I didn't read the entire article, but thought the pic and graph do a decent job of explaining how certain items are impacted.


https://www.bbc.com/news/articles/cn93e12rypgo

Why are they necessary?

Building materials prices at Lowe's went up overnight.

Several music shops I know have stopped selling imported musical instruments entirely.

I would love to see the economic model on this particular item that says it is cheaper to ship the material between three different countries for making a product rather than just keeping it all within the US, or even bringing some items in house vertically.

It may suck for a little bit but let's see if some of these tariffs get negotiated down in the next few days Lutnick mentioned there may be an update today that would modify some of these.

We shall see...

I think you have to consider who owns the rails. I'm not sure this NAFTA is necessarily cheaper for consumers. But it certainly puts money in somebody's pockets.

The goal is to get more stuff made in the US, is it not?

Existing tooling. That's the only way.

Now, there's a chance it's politically engineered rather than supply chain designed (see F-35 for extreme example) where a bit of manufacturing in each country lets them circumvent trade barriers, but that still wouldn't give you a case for it being lowest supply chain cost.

Ryan the Temp said:

---

Several music shops I know have stopped selling imported musical instruments entirely.

---

Sounds like a protest, as opposed to a business decision.

Ryan the Temp said:

---

Building materials prices at Lowe's went up overnight.

Several music shops I know have stopped selling imported musical instruments entirely.

---

Demand for building materials has been slowing for months already. The consumer will not pay higher prices. Exporting country will end up eating the tariff.

CanyonAg77 said:

---

Ryan the Temp said:

---

Several music shops I know have stopped selling imported musical instruments entirely.

---

Sounds like a protest, as opposed to a business decision.

---

They want predictability in instrument pricing because margins can be narrow and manufacturers often restrict pricing for all retailers. Many of the major instrument makers will stop selling to any retailer who does not abide by their pricing structure.

ETA: It is not uncommon for the turnaround on instrument orders to be in excess of six months.

It's expensive to own the Libs.

CDUB98 said:

---

I would love to see the economic model on this particular item that says it is cheaper to ship the material between three different countries for making a product rather than just keeping it all within the US, or even bringing some items in house vertically.

---

I think vertical integration like that would be extremely capital intensive.

Tex100 said:

---

The goal is to get more stuff made in the US, is it not?

---

How does this happen without government action? Companies will either need cheap financing (ie low rates) or special loans/handouts from the government (more deficit). We don't have either of those.

Some companies have been hoarding cash, like in the tech space, but I don't know that industrial manufacturers have been, especially since things are still not 100% normal after COVID. Raw material costs have been high. I don't think Apple is going to spin up a steel mill or engine manufacturing plant...where is the CAPEX for all this growth going to come from?

BigFred said:

---

It's expensive to own the Libs.

---

Maybe, but the beauty of tarrifs is that they affect every American regardless of which side they vote for. I can't think of a more fair type of deal.

GarlandAg2012 said:

---

CDUB98 said:

---

I would love to see the economic model on this particular item that says it is cheaper to ship the material between three different countries for making a product rather than just keeping it all within the US, or even bringing some items in house vertically.

---

I think vertical integration like that would be extremely capital intensive.

---

Yes, it could be. Auto makers use to be very vertical, but went away from it.

I'm simply curious. The landscape of costs changes over time. What was once prohibitive may now be practical.

CDUB98 said:

---

I would love to see the economic model on this particular item that says it is cheaper to ship the material between three different countries for making a product rather than just keeping it all within the US, or even bringing some items in house vertically.

---

One would think they've studied that extensively...

As an example, I got to tour a plastics molding facility in Georgetown, TX about a year ago. One of the things they make is a grab handle for pickups and SUVs. On their higher end models, there's a piece of leather that wraps the handle. It's cheaper for them to ship that piece to Mexico, have the piece of leather stitched on by hand, and then shipped back. And they didn't just decide that on a whim either.

All the elite Ivy League graduates, consultants and bureaucrats, have pushed USA manufacturing companies to outsource and offshoring for the past 30+ years. What we are left with now it very specialized factories and loooong supply chains. Ross Perot "that giant sucking sound…." Was absolutely correct.

The EPA shut down a bunch of foundries in the states or made cost soo high they were untenable. So we went to Canada to get our casting made. Now we are getting hosed on those...game set and match government always Fs you no matter what...

So this screws us as a manufacturer...

I am personally willing to endure temporary hardship for a better future economically and for national security. We have already seen the tariffs as threats force investment into American industry.

The point is simple. Access to the American economy is the biggest golden ticket the world has ever seen. Now, if you want access you will have to invest in America.

GarlandAg2012 said:

---

CDUB98 said:

---

I would love to see the economic model on this particular item that says it is cheaper to ship the material between three different countries for making a product rather than just keeping it all within the US, or even bringing some items in house vertically.

---

I think vertical integration like that would be extremely capital intensive.

---

Not when tariffs get put in.

GarlandAg2012 said:

---

CDUB98 said:

---

I would love to see the economic model on this particular item that says it is cheaper to ship the material between three different countries for making a product rather than just keeping it all within the US, or even bringing some items in house vertically.

---

I think vertical integration like that would be extremely capital intensive.

---

Aggie95: The SME who spends two years painstakingly finding the only vendors and manufacturers on the planet who will make the specialty item at anything approaching affordability

CDUB98: Manager at the final meeting before approving all contracts who asks, "Why don't we just make it ourselves?"

Aggie95: SME who says we looked at this 3 years ago, and found that we don't have the expertise, and the in-house capital requirements would be a non-starter

CDUB98: But we have some under-utilized assets

Aggie95: Those assets are written down, moth-balled, in ill-repair, or would require retro-fitting, and we lack the technical know-how, but I'll dust off the 2 year old report and re-visit it.

GarlandAg2012: Brings CDUB's question to the board. 6 months later, GarlandAg2012 comes back and says heck no, we aren't spending that kind of capital

Aggie95: That's nice. Two of our 5 manufacturers are no longer interested, and Honda has reduced our market share anyway.

Aggie95's Boss at annual performance appraisal: CDUB98 has moved into the executive VP role, but based on his input, we've decided that your performance was average this year. 1.8% raise. So, have you thought about how we might improve our piston supply?

BigFred said:

---

It's expensive to own the Libs.

---

It's very very expensive to be the only country of three countries that take the flow of illegal traffic and defense of the continent seriously while the other two countries make alot of money off our enormous economy without spending much on their own defense or helping us with illegal activity.

Canada spends about 1.5% of GDP and Mexico spends .68% on their defense. Sure makes it just a little bit easier for Canada to full blown socialism when they are attached to the U.S. hip. I don't have number to back it up but I grew up on the border, I don't think Mexico has to spend much on law and order. The cartels own law and order in that country. We know this because it's the Wild West in the areas tourists don't go and relatively safe at the places where cartels make a lot of money from tourist spending. Mexico sure does a great job making sure central and South Americans and numerous other illegal immigrants don't settle in their country. But buy howdy as dangerous as it is to hang out in certain parts of Mexico it sure seems like illegal immigrants find their way through the country and across our borders as long as they pay the right price in money or forced criminal sexual abuse.


Mexico is a major burr in my saddle. I think the country is awesome and most Mexicans are awesome people. I feel bad for them that they have a country ruled by criminals and corruption. The country could be so much more than it is and have an economy that is a near equal to ours relatively speaking. The back and forth of Mexicans to the US could and should look much more like Canada. And I truly hope that one day it is that way.

I don't mind having a shared economic system with Canada and Mexico, but it would sure be a lot more powerful if all three countries were operating off the same page when it comes to limited government, free market capitalism, freedom, liberty, law and order.

HTownAg98 said:

---

CDUB98 said:

---

I would love to see the economic model on this particular item that says it is cheaper to ship the material between three different countries for making a product rather than just keeping it all within the US, or even bringing some items in house vertically.

---

One would think they've studied that extensively...

As an example, I got to tour a plastics molding facility in Georgetown, TX about a year ago. One of the things they make is a grab handle for pickups and SUVs. On their higher end models, there's a piece of leather that wraps the handle. It's cheaper for them to ship that piece to Mexico, have the piece of leather stitched on by hand, and then shipped back. And they didn't just decide that on a whim either.

---

Umm, yes, I very well know they study it extensively. It's why I said I'd love to see the model. I am a curious person by nature and always seeking to learn, but without the data, I can only speculate.

GarlandAg2012 said:

---

Tex100 said:

---

The goal is to get more stuff made in the US, is it not?

---

How does this happen without government action? Companies will either need cheap financing (ie low rates) or special loans/handouts from the government (more deficit). We don't have either of those.

Some companies have been hoarding cash, like in the tech space, but I don't know that industrial manufacturers have been, especially since things are still not 100% normal after COVID. Raw material costs have been high. I don't think Apple is going to spin up a steel mill or engine manufacturing plant...where is the CAPEX for all this growth going to come from?

---

Trump has repeatedly harped on GUTTING regulations and incentivizing companies to invest and build in America. Bessent is deeply focused on getting rates down. It's all tied together strategically.

Cannew said:

---

The EPA shut down a bunch of foundries in the states or made cost soo high they were untenable. So we went to Canada to get our casting made. Now we are getting hosed on those...game set and match government always Fs you no matter what...

So this screws us as a manufacturer...

---

Sounds like Trump is right and we need to gut the EPA and gut regulations. In the long run, you will buy American again and prosper.

We get tariffs on product at my company on items we buy from China. But if we bring it in, use it in manufacturing, and then ship the finished good back out of the country we recoup the tariff.

Tariffs also only cover the cost of the good. The packaging, profit, transportation, additional taxes, marketing, etc. that go into that product aren't tariffed. So yes you may have paid $100 for that item but not all $100 is getting tariffed.

I don't quite understand the graphic…

So the tariff is being paid just to ship a partial manufactured item into the country that isn't being resold in that country?

How do you value an item in-between manufacturing steps, it's scrap value?

And, it's not being resold in Canada. It's not transferring ownership. It's the same owner, just going to different vendors for different steps of manufacturing.

Am I missing something?

aezmvp said:

---

Tariffs also only cover the cost of the good. The packaging, profit, transportation, additional taxes, marketing, etc. that go into that product aren't tariffed. So yes you may have paid $100 for that item but not all $100 is getting tariffed.

---

BigFred said:

---

It's expensive to own the Libs.

---

But as you prove time and time again...self-ownage is free!

bmks270 said:

---

I don't quite understand the graphic…

So the tariff is being paid just to ship a partial manufactured item into the country that isn't being resold in that country?

How do you value an item in-between manufacturing steps, it's scrap value?

And, it's not being resold in Canada. It's not transferring ownership. It's the same owner, just going to different vendors for different steps of manufacturing.

Am I missing something?

---

I can't say for sure, but I have to review BOMs and COO for anything we ship to Oman and calculate value of the components within the BOM that are US COO vs international. Over a certain % US components triggers a payment. Maybe it's something like that.

Tariffs are the only part of Trump's agenda that I'm squishy on. The stated reason of compelling Canada & Mexico to crack down on Phentanyl seems like a reach. And frankly, it's our problem not theirs, as we have millions of druggies that drive the demand that all the trafficking caters to. Harming the economy, angering our trading partners and causing inflation on behalf of junkies who are aware of the risks but continue their lifestyle anyway seems unwise.

With progress comes pain. If you didn't know this could happen you weren't paying attention.

An excellent breakdown of the Tariff War…

🔥🔥🔥 pic.twitter.com/15ppkc54Q9

— American AF 🇺🇸 (@iAnonPatriot) March 4, 2025