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View Full Version : 25% Tariffs on various machines from China, effective July 6, 2018



Danl
07-16-2018, 10:31 PM
Prices on Lathes, Milling Machines, Surface grinders and tons of other items from China are going up in price. No welders or plasma cutters noted.

https://ustr.gov/sites/default/files/enforcement/301Investigations/List%201.pdf?utm_source=allied&utm_medium=email&utm_campaign=180716_tariff-updates

Might be a good idea to buy from inventories already in the states? This is all subject to change and is still being worked out by those in authority.

Dan L

TerryH
07-16-2018, 10:40 PM
I noticed that much if not all of Grizzly's China produced equipment went up on the day the tariffs went into effect. Hard for me to believe that every single one of those machines were not on US soil already. I've always been a fan of Grizzly but this moved makes me wonder.

smithdoor
07-16-2018, 10:59 PM
Need more profits
I have never purchase from Grizzly
What did with South Bend Lathe that sticker with SB on and put it a China made and triple price

Dave

I noticed that much if not all of Grizzly's China produced equipment went up on the day the tariffs went into effect. Hard for me to believe that every single one of those machines were not on US soil already. I've always been a fan of Grizzly but this moved makes me wonder.

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CalM
07-16-2018, 11:14 PM
Good!

My machine tools just appreciated!

But I'm not selling..... ;-)

The Artful Bodger
07-16-2018, 11:36 PM
The link in the OP, check 8429.11.00, looks like a misprint so there could be an opportunity there before the notice!

J Tiers
07-16-2018, 11:43 PM
Any business sells for a price that reflects the cost to restock the same item. Otherwise they are going to have to invest more in stocking. They already did that once to get going. no reason to do it every time the price changes.

If they order one to replace what you bought, it costs them more as of that date, so they raise the price accordingly. I'd do it, why should they not do it?

CalM
07-17-2018, 02:46 AM
Any business sells for a price that reflects the cost to restock the same item. Otherwise they are going to have to invest more in stocking. They already did that once to get going. no reason to do it every time the price changes.

If they order one to replace what you bought, it costs them more as of that date, so they raise the price accordingly. I'd do it, why should they not do it?

The logic is rational.

But the excuse to significantly increase the profit on present trade goods does seem contrary to the typical person who looks at return on investment as a percentage.

Why should that machine return 30% when if it would have been purchased yesterday would have returned 10%. I'm sure you get my drift.

I do realize that is the way of the world. Stock markets and fuel pump prices are perfect example. A wiff of uncertainty, and the consumer shoulders the burden.

Doc Nickel
07-17-2018, 04:09 AM
Why should that machine return 30% when if it would have been purchased yesterday would have returned 10%.

-That's not how it works.

Very simplified: Your store sells Widgets. You buy the Widgets in bulk for $5 each, and sell them for $10.

You sell ten Widgets a month. That earns you $100. $50 of that goes to buy the next batch of Widgets, the other $50 is profit.

You just bought a fresh inventory of ten Widgets, and suddenly the bulk cost goes up to $7 each.

Now, if you keep selling them at the same price, you earn the same $100 for those ten Widgets. But in order to replace them, it now will cost you $70. Your profit at the end of the month drops to $30.

If you raise the price to $12, yes, you will now earn $120. More profit? No. The next months inventory costs you $70, leaving the same $50 in profit.

EVERY retailer does the exact same thing. Grocery stores, shoe stores, car dealerships, even restaurants. The most famous example of course is gas stations- everyone does it, but the gas stations are simply the most obvious ones due to the inherent instability of oil prices.

Jacking up prices in current inventory is in no way underhanded. Every retailer does it.

Doc.

Paul Alciatore
07-17-2018, 05:09 AM
Why should they not do it?????

How about a sense of fair play. But then, what do they do if/when the price goes down? Hum, I guess I never thought it all the way through. Perhaps a stepped increase, some now and more when they run out of the old stock.




Any business sells for a price that reflects the cost to restock the same item. Otherwise they are going to have to invest more in stocking. They already did that once to get going. no reason to do it every time the price changes.

If they order one to replace what you bought, it costs them more as of that date, so they raise the price accordingly. I'd do it, why should they not do it?

Doc Nickel
07-17-2018, 05:34 AM
Why should they not do it? How about a sense of fair play.

-That IS "fair play". Fair Play means staying in business, and earning enough to pay leases, employees and utilities.


But then, what do they do if/when the price goes down?

-For most commodities, the price comes back down. Again, the famous one is gasoline prices, but groceries are largely the same thing. Wal-Mart's famous 'price rollback' thing often has as much to do with the commodity price going down as it does simply putting the stuff on sale 'cause it's not moving fast enough.

Doc.

old_dave
07-17-2018, 01:34 PM
I just checked Create Tool's website. They are sellers of a generally well regarded line of 40 position tool posts and holders (Multi-Fix pattern) which are made in China. Their AD 2075 and AD 2090 tool holders show a current price of $33.60. This is the same price I paid back in March. I didn't wade through the list to see if it includes lathe tool posts or a category that sounds like it would encompass such things.

David

wierdscience
07-17-2018, 11:20 PM
-

Jacking up prices in current inventory is in no way underhanded. Every retailer does it.

Doc.

Exactly right,most business dealing in imports are pass through businesses.Current inventory being sold pays for the next inventory buy in.A sudden drop in price can be equally damaging in that it's easy to get stuck with overpriced inventory.

At work there are several different tools I can use to mitigate the spikes.-

I can reduce inventory buy in's of slow moving products to limit the potential for loss.
I can change vendors and even product lines in a swap for better pricing or better quality
I can offer discounts for demand orders filled from vendor's inventory rather than my shelves

TerryH
07-18-2018, 07:35 AM
Couple of excerpts from Grizzly emails and statements...

From an email they sent... "Once we are out of stock, future shipments of these machines will have a 25% price increase due to the tariffs."

From their tariff statement on their site... "Q: Will the tariff increases apply to items we already have in stock?
A: Items that are backordered or have limited quantity and are set to run out soon will see an immediate cost increase. All other items will have the tariff price increase applied when we receive new stock from the factory."

Apparently everything was in limited quantity. :confused:

I get that they have a margin and that the price has to be adjusted to offset the tariffs. It just appears that they said one thing in their official statements and then did something else. Perhaps I'm wrong. I've searched thru lots of lathes etc... and pretty much across the board there are tariff increases. They do show the tariff in a separate charge which is nice so the buyer can easily see exactly how much the tariff is on that particular item.

Juiceclone
07-18-2018, 07:43 AM
greed

smithdoor
07-18-2018, 09:24 AM
Couple of excerpts from Grizzly emails and statements...

From an email they sent... "Once we are out of stock, future shipments of these machines will have a 25% price increase due to the tariffs."

From their tariff statement on their site... "Q: Will the tariff increases apply to items we already have in stock?
A: Items that are backordered or have limited quantity and are set to run out soon will see an immediate cost increase. All other items will have the tariff price increase applied when we receive new stock from the factory."

Apparently everything was in limited quantity. :confused:

I get that they have a margin and that the price has to be adjusted to offset the tariffs. It just appears that they said one thing in their official statements and then did something else. Perhaps I'm wrong. I've searched thru lots of lathes etc... and pretty much across the board there are tariff increases. They do show the tariff in a separate charge which is nice so the buyer can easily see exactly how much the tariff is on that particular item.

They just making more money
The whole sale goes up 25% now that can cut the profit or just increase by the whole sale by 25%.
Grizzly is now making lot more profit and blaming on Traffit .
I seen sites where some increase all price by 25% now.
Others are doing nothing

Dave

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DS_park
07-18-2018, 09:39 AM
Question. Where during the importation and to what value is the tariff collected?
My assumption was the 25% was collected prior to goods entering in to the country at the value of the goods entering. Could be wrong though.

example. Pre tariffs, XYZ widget co imports a tool that costs them $1000 a unit. The markup to retail customer is 50% so $1500 is the retail price (pre sales tax).

Post tariff. Each unit still costs $1000 however an additional $250 is collected at the border. Now what.
$1725 retail ($1500 + 250 tariff)
$1875 retail (50% markup on the 1250 after tariff)
$2250 retail (25% tariff added to 1500 retail)

Some might jump to the assumption of greed but company might be smart to collect a little extra to set aside if the tariffs suddenly disappear.

3 Phase Lightbulb
07-18-2018, 11:10 AM
Capitalism, it's the best operating system ever created for the able-minded.


https://www.youtube.com/watch?v=c7AL44keDZw

AD5MB
07-18-2018, 11:20 AM
capitalism is a bogus word invented by the delusional deluder, Karl Marx

In a free market economy, a thing is worth what the buyer is willing to pay and the seller is willing to accept. the seller sets the price, the customer decides whether to stop and look or keep on walking.

"fair" is a really sweet thing to teach kindergartners, who should be over it before they reach adulthood.

smithdoor
07-18-2018, 11:22 AM
Let say at wholesale the price is 100.00 and retail price 200.00 with a profit of $100.00
Today the wholesale is $125.00 If keep the $100.00 profit the retail price would be $225.00 not so bad

But some are rizing price to $250.00 They now making a profit of $125.00
A win for retailers too bad for you and blaming on Traffit

Dave
Question. Where during the importation and to what value is the tariff collected?
My assumption was the 25% was collected prior to goods entering in to the country at the value of the goods entering. Could be wrong though.

example. Pre tariffs, XYZ widget co imports a tool that costs them $1000 a unit. The markup to retail customer is 50% so $1500 is the retail price (pre sales tax).

Post tariff. Each unit still costs $1000 however an additional $250 is collected at the border. Now what.
$1725 retail ($1500 + 250 tariff)
$1875 retail (50% markup on the 1250 after tariff)
$2250 retail (25% tariff added to 1500 retail)

Some might jump to the assumption of greed but company might be smart to collect a little extra to set aside if the tariffs suddenly disappear.

Sent from my SAMSUNG-SM-J320A using Tapatalk

J Tiers
07-18-2018, 11:23 AM
It is only "greed" if you are so "entitled" that you think the seller should take a loss so that you do not have to pay more. Sometimes the seller will actually do that, if the change is temporary, or not a large amount, in order to avoid losing customers on a repeat business item. One time sales, not so much.

But a 25% change is a biggie. Plus, the sellers in china were probably raising prices to deal with the trouble of complying with new rules. Or because they were told to do so to punish the stupid americans as much as possible. Or both. The net increase may be 25% on a larger amount.

It's actually pretty rude to ask the sellers to take a big hit just so you do not have to pay any more. Not to be too insulting here, bit just WHO is the one who is "greedy"? The one who charges more to cover costs, or the one who expects the seller to absorb a 25% or more price increase?

Is the seller supposed to NOT make his living just because two governments are d**k-waving? The seller can look forward to losses just because higher prices reduce sales.

Black Forest
07-18-2018, 11:34 AM
This is how I handle any retail business.

https://www.use.com/images/s_2/36eae9b9e579aeccc075.jpg (https://www.use.com/OhFcI)https://www.use.com/images/clicklarge3.gif (https://www.use.com/OhFcI)

3 Phase Lightbulb
07-18-2018, 11:53 AM
It will be very interesting to see the net affect to people in the USA from the 25% tariffs. I expect it might benefit more people than it harms.

J Tiers
07-18-2018, 12:12 PM
It will be very interesting to see the net affect to people in the USA from the 25% tariffs. I expect it might benefit more people than it harms.

THAT probably depends on what you call "harm" and what you call a "benefit".

it is not making friends..... just as people need friends, countries need friends. We used to have more friends than we do now. The trend is in the wrong direction.

Escaping the "political", there IS in fact money to be made by raising prices in general and blaming the tariffs.

And, maybe something will be made here just because it is expensive to import now. That could employ more people, but the tariffs will likely be temporary, and you do not site factories based on temporary conditions.

Might go the reverse, though, since we (used to) export things, now it is more expensive to export, due to retaliatory tariffs. SO you see companies taking part f their manufacturing overseas to avoid having a US origin on the product. That means layoffs here. So overall, the effect is likely to be on the down side.

And, it may be permanently harmful, because the chinese, for one, are switching soybean and other farm product purchases to other suppliers, such as russia, and they may not come back when the tariffs are removed. Others are apparently doing the same. Missouri is a big supplier of farm products on the export market, so it hits here fairly hard.

fjk
07-18-2018, 01:43 PM
I expect it might benefit more people than it harms.

Doubtful
For example
We currently have something like 200k people working in steel mills, and net import something like 30-40% of our steel consumption.
Letís be generous and say that all imports disappear and our steel production goes up 100%. That means another 200K steel mill workers.
But 330m people pay more for everything hat has steel in it (or see less profit in their company,less growth in their investments, etc)

330m people get harmed
200k benefit

This of course ignores people who import steel and lose their jobs, or whose companies/products canít compete because of the higher cost of the steel, etc. it also ignores the folks who benefit because the unemployed steelworker is now employed and now can afford to buy a new car or go on vacation... Those effects are harder to quantify.

Glug
07-18-2018, 01:48 PM
Call this what it actually is - a HUGE TAX INCREASE.

Where is the money from this huge tax increase going?

3 Phase Lightbulb
07-18-2018, 02:39 PM
Hopefully the tariffs are permanent. The income the treasury department gets from the tariffs now and hopefully more tariffs on an additional 500B of imports later might allow the new 2018 IRS tax brackets to hold and maybe even reduce them even more. And the tariffs need to be permanent for them to do good for the USA. I think over time China will have no choice but to absorb some of it and reduce costs further while the USA still collects tariffs. I'll take a 2%-5% reduction on federal taxes over a 10%-25% increase on some foreign items any day of the week including Sunday.

reggie_obe
07-18-2018, 02:44 PM
Doubtful
For example
We currently have something like 200k people working in steel mills, and net import something like 30-40% of our steel consumption.
Letís be generous and say that all imports disappear and our steel production goes up 100%. That means another 200K steel mill workers.


You leave out the positive effect of building the extra capacity onto existing mills or construction of completely new ones. Workers that would be employed in the design< engineering and construction. The need for more rail and trucking, electric and natural gas, more workers in the industries that supply and support steel production, etc., etc.