[Norvil l]

Just wondering what people think about the potential 35% tariff on Chinese products and how it will affect the hobby machining industry.

Please don't turn it into a political rant- keep it restricted to machine costs etc.

[MetalDawg]

I think at first it will sting, like an antibiotic shot. In the long run, I believe it will jump start entrepreneurs building these machines in the USA once again. Typically, that means a better-constructed machine for you plus American jobs. The tools will naturally be more expensive, but for that expense, you will get much better quality.

[ger21]

I can't see it happening. The people won't stand for a 35% price increase on a LOT of stuff.

[RussellCofID]

I tried to make this brief but it just wasn't possible. I did avoid political rhetoric but these issues are complex. I would not post such things on Facebook but a machinists forum I think would be more well reasoned.

From my personal observation: Tariffs are always a balancing act. Whenever one side erects a tariff, the other side responds and they usually are very crafty and respond toward an industry that is marginal but has large support like farm products. So the result is a 'trade war'. As I am sure you understand if you have ever been in one, there are casualties on all sides in ANY war. Thus the common adage that 'protectionism doesn't work'.

In practical terms it takes time. The first effect will be from a slowdown of trade to complete stop depending on the severity of the tariffs. 10% or so can usually be absorbed with a little pain, more causes changes to the balance of trade as most people and companies cannot just raise their prices to compensate.

Importers will investigate the costs of circumventing the increase by means legal or illegal: making parts locally, using automation to reduce local production costs or mis-labeling imported products and as far as exporting and relabeling in a third country.

Lastly local entrepreneurs may have a chance to build up production to undercut the now higher priced imported products with quality local-made products but this takes time, planning and long term investment by which time the fickle will of democracy will likely have changed the political powers so such investors will have this in mind.

So short term: pain, mid term: adjustment, long term: business will continue, people will eat, investors will continue to find other investments to make a profit, new businesses will replace ones that have failed.

So, my opinion of such changes: change is constant, 'the way things are' does not continue to work, going back to 'the way things were' is quite impossible, so the questions are:

Things must change but how extreme do you want the change to be? How much pain should the 'average Joe' be put through to 'improve' things in the future? How much of the costs must be borne by business and by government? (businesses closing and people starving is bad for government coffers) All things to be considered in a tariff change.

For me, I would LOVE to buy only high-quality, locally produced products and food but the reality is that there is a place for inexpensive nationally or internationally produced products. Balance, though, is usually lacking in politics...

[Paul-JB]

Personally I don't think it will materialize but for discussion sake if it does then yes we or shall we say the majority - will end up paying higher prices. There will be a small number of "winners" but many more losers. High quality goods are in fact available right now but of course they are correspondingly expensive. No one will start building high quality machines with expensive labor (Those that demand $10 by day to produce a widget while expecting to go buy it that evening at Wallyworld for $5) unless of course they are subsidized with other peoples money.
It appears we cannot afford ourselves.

[daniellyall]

A 35% tax break for any company that brings all it manufacturing home will be a massive win, A tariff will kill small company like tormach, A 1100 being 35% more than what it cost's now would be a killer. the 35% tax break that will be around $7000 that would = a casting done in USA + a job or 2 and most of the tax break back by more people working. simple math there. Long term gain, sort term gain

[instructor37]

I can't see it happening. The people won't stand for a 35% price increase on a LOT of stuff.

I doubt that there would ever be an across the board 35% tariff on Chinese goods. Most likely they would target those products that the Chinese are dumping on our market, most notably steel and bearings. Both of those products are an integral part of mills and lathes, so there could be some increases. Most metalworking products are now tariffed at around 4-5%, so a full blown increase to 35% would be fairly substantial. It could affect businesses in a number of ways- if a company had a years worth of inventory in stock, they could hold prices at current levels for a year while their competitors relying on advance orders would be at a price disadvantage. Companies with large fixed overheads and who rely on bank financing for their inventory would also suffer, while those with lower overhead and good cash reserves could adjust more easily to the added costs. In the end, however, the tide will raise all boats equally, but those who are at the top end of the hobby market may find themselves priced too high for the customer base.