Thing I have noticed about the tariffs on tools....

[srv52761]

. . .  Frankly, the whole tariff increase isn't stopping me from getting what I planned on. Just pulled the trigger on a Jet edge sander on the 10% sale that I have been planning on since last fall. A number of factors have delayed the purchase till now and an extra $50 isn't even a consideration to me.

The tariffs won't last that long. Just wait till it's over.

I have no business background, but the tenor of packerguy's comment leads me to be skeptical of daddo's.

I thought the purpose of the tariffs was to force the affected country to either raise the price of their product to cover the tariff, hence making a similar U.S. product more competitively priced, or to absorb the tariff cost and reduce their profit.

If PG's sentiment is common, then that does not bode well for the efficacy of the tariffs. As per Papa Grizz, and PG first post, most manufacturers chose the former. Yet it made little difference to the wholesaler and retailer; they maintained most of their profit margins by increasing price. The consumer picked up the slack, and that extra $$ went overseas to China (Pappa Grizz suggested that the increase in price would still not cover the increase in cost), increasing the trade imbalance.

It seems the only ones really out is PG ($50) and PG (whatever the difference in profit margin).

Am I missing something?

[packerguy®]

I have no business background, but the tenor of packerguy's comment leads me to be skeptical of daddo's.

I thought the purpose of the tariffs was to force the affected country to either raise the price of their product to cover the tariff, hence making a similar U.S. product more competitively priced, or to absorb the tariff cost and reduce their profit.

If PG's sentiment is common, then that does not bode well for the efficacy of the tariffs. As per Papa Grizz, and PG first post, most manufacturers chose the former. Yet it made little difference to the wholesaler and retailer; they maintained most of their profit margins by increasing price. The consumer picked up the slack, and that extra $$ went overseas to China (Pappa Grizz suggested that the increase in price would still not cover the increase in cost), increasing the trade imbalance.

It seems the only ones really out is PG ($50) and PG (whatever the difference in profit margin).

Am I missing something?

For me, if it wasn't a business use purchase I wouldnt be buying. Actually I got the email today saying its on backorder till the end of Sept. I canceled the order. Maybe ill wait for a used one to pop up. I just wont wait for 2-3 months.....and that has nothing to do with not wanting to pay a tariff but more about a company that relies on getting their product from half a world away, and not being able to invintory enough product stateside. This has been a problem for more than a year for them with this model. Its too bad. 

Honestly, I think the tarriffs WILL put pressure on China, and the companies that continue to only do business with them. Soon, a company that gets their entire offering from China will have to make a choice, have their sales cut because people wont pay the increased cost, or start bringing home manufacturing again. Really, thats the goal IMHO. Its sad the state Mexico is in, because they could easily become China for the western world, but their leaders would rather deal in drug cartels and allowing illegals to pass through at no regard. There is already quite a bit of manufacturing on the border, I bet that number would go up by a factor of five in 18 months or so, maybe it will.

At the end of the day China NEEDS us buying product more that we NEED their products. We gotta remember we are a nation of 350 million people that largely dont struggle (to the world standards) but China has 1.4 billion people that need to eat. If they dont import tons of food, there is a large hole in their food supply. We can go without manufactured crap, they cant go hungry. Its like Europe needing NG......they need to heat their buildings in winter....and there are only so many tress they can burn.

My main point was how companies like JPW (the equity firm that owns Jet) will "raise prices" curiously the same % as the tariffs (and with a price increase there would be no roll back), or Grizz that add the "tariff price" onto the tool (which is clearly marked) and would assume that will drop off if the tariffs end. Its business, but it just annoys me that companies that deal with overseas production continue to increase their products annually with little done to change their business models to reflect needing to change like they did in the 90's to go to China all together. 

It is what it is.

[Admiral]

I thought the purpose of the tariffs was to force the affected country to either raise the price of their product to cover the tariff, hence making a similar U.S. product more competitively priced, or to absorb the tariff cost and reduce their profit.

Almost but not quite, you are halfway there, it forces the affected country to lower their prices to account for the tariff, affecting their profit margins, which I doubt are anywhere near 25% (an absolutely huge margin for stationery power tools), so that won't happen as Chinese manufacturers would be exporting at a significant loss.  That forces the importers to raise prices to the consumer, which dampens demand, and harms the actual Chinese manufacturer by reducing orders.  In turn, it would make US produced product more competitive, but frankly I can't think of any domestically produced competitive products that would benefit, at least in the context of stationery woodworking machinery.  Perhaps only General, in Canada, actually makes, say, tablesaws and such domestically; and its been decided in DC that the US is sideways with Canada anyway.... and who knows what the tariffs are on european manufacturers.....

To produce jointers, tablesaws, drill presses, planers here in the US would be quite expensive and need ramp up time, and no manufacturer is going to invest in a production facility unless they know the tariffs will continue for some time to allow recoupment of their investment.  Given the flip-flop of trade policy, which changes at the whim of that certain person mentioned above, no rational business person would invest in a manufacturing plant in this narrow category without any certainty on that point.

Bottom line, as I see it, vintage machines will increase somewhat in price for the time being, and new machines will increase to the particular tariff rate that is applicable.  I don't know, but it seems that Taiwan is exempt, at least according to Jet, so Griz will be moving production there to do an end run around all of this.  I feel sorry for Papa Griz, as this throws his business model a wicked curve ball.  It's otherwise a reputable and honorable company, from whom I've bought machines in the past with complete satisfaction.

[Huxleywood]

  In turn, it would make US produced product more competitive, but frankly I can't think of any domestically produced competitive products that would benefit, at least in the context of stationery woodworking machinery.  Perhaps only General, in Canada, actually makes, say, tablesaws and such domestically; and its been decided in DC that the US is sideways with Canada anyway.... and who knows what the tariffs are on european manufacturers.....

Yes, I doubt Jeff at Northfield is overwhelmed with new purchase orders.  As far as General goes the tariffs are years too late for them, the Drummondville facility closed quite a while ago, the GI portion of the business also closed more recently.  

Of the importers of hobby/light commercial machines, Grizzly seems to be getting hit the worst.  Just in the last year or so they moved the production of many of the high volume machines from Taiwan to China.  Then the factory started a major capital expansion plan AND was hit with a ton of new environmental regulations that significantly reduced export volume then the tariffs punched them in the nose.  The Taiwanese, Austrian, German and Italian manufacturers seem to be poised to benefit the most (on the small machine side), I suppose small shops like Ritter might get a bump as well.  Felder's low end Hammer line starts to look much more appealing when compared to the Chinese machines that have had their retail raised by 25% at this point Grizzly an a couple of Baliegh machines are the only ones to see the full increase AFAIK.

[Arlin Eastman]

What makes you think this ?

China can afford to ride this, so we're not likely to see change here.

If the current admin. re-up then we're looking at 7 more years of tariffs at minimum.  This assumes the new crowd makes their repeal first priority.  Think how much woodworking equipment costs is gonna be on the top of the to do list ?  


That's a looooong time in my book to wait on a tool .

I agree with Daddo and Packerguy

If you seen the EU has already caved in to some degree and it is the President of France using Trumps (The Art of the Deal) is using it against Trump which I had to chuckle about, but he even said he is not wanting Tariffs at all either.

I have always been told the Grizzly has had its stuff made in Taiwan if that is true it should not be going up.

It is LOOOONG overdue that tariffs are made equal and not just one way.  China is making Trillions off of us and will either quit the tariffs or lose a ton of business which I really hope it cuts into them big time.  The Steel workers are already going back to work and several business in China have had to close.  Time for American Money to be spent here again - the hard line unions.

[Huxleywood]

I have always been told the Grizzly has had its stuff made in Taiwan if that is true it should not be going up.

What you were told is partially true and partially false.  A large chunk of their more popular machines (read as cheap) are made in China.  If you download the specification sheet on any machine near the bottom it names the country of origin and all the ones that show the 25% tariff being added are from China.

[JimDaddyO]

Just as a side note...

The Quebec aluminium industry raised their prices 10% months before the tariffs were applied in anticipation of them being implemented.  That lead to an increased profit of some $600 million (CDN) over that couple of months time frame.

The Quebec aluminium industry was developed, in large part, in cooperation with the US military complex to supply raw material required for the equipment that they build.  Naturally, the biggest customer of these companies is the US government which gets it's money from tax revenue, or, when short of that, floating a bond to be purchased on the market (which is how budget deficits are financed).  Many of these bonds are bought by China as there is a guaranteed percentage return when the bond matures.

In this instance, the result is that Canadian companies have an increased profit, and the Chinese government makes a tidy sum in interest, all at the expense of the American tax payer.

[Papagrizzly]

Yes, I doubt Jeff at Northfield is overwhelmed with new purchase orders.  As far as General goes the tariffs are years too late for them, the Drummondville facility closed quite a while ago, the GI portion of the business also closed more recently.  

Of the importers of hobby/light commercial machines, Grizzly seems to be getting hit the worst.  Just in the last year or so they moved the production of many of the high volume machines from Taiwan to China.  Then the factory started a major capital expansion plan AND was hit with a ton of new environmental regulations that significantly reduced export volume then the tariffs punched them in the nose.  The Taiwanese, Austrian, German and Italian manufacturers seem to be poised to benefit the most (on the small machine side), I suppose small shops like Ritter might get a bump as well.  Felder's low end Hammer line starts to look much more appealing when compared to the Chinese machines that have had their retail raised by 25% at this point Grizzly an a couple of Baliegh machines are the only ones to see the full increase AFAIK.

Actually not! Our presence in Taiwan is actually larger in Woodworking machinery than in China. Our office of engineers and inspectors in Taiwan is twice the size of that in China. There are many items that are affected, but many more remain unaffected. The funny thing is that even with the tariffs on some affected items like Planers and Jointers, we still have good sales and have not caught up with back orders. We also never ceased buying planers and jointers from Taiwan and those are making a comeback in a big way now.

[WilliamHodge]

Actually not! Our presence in Taiwan is actually larger in Woodworking machinery than in China. Our office of engineers and inspectors in Taiwan is twice the size of that in China. There are many items that are affected, but many more remain unaffected. The funny thing is that even with the tariffs on some affected items like Planers and Jointers, we still have good sales and have not caught up with back orders. We also never ceased buying planers and jointers from Taiwan and those are making a comeback in a big way now.

What would it take for you to make equipment in the United States?

[Papagrizzly]

What would it take for you to make equipment in the United States?

Not practical and the market could not sustain the 4X price increase.