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Posted by: mepstein Mar 14 2018, 05:07 PM

Got an email from restoration design -

To all our valued customers,

President Trump has signed an executive order imposing a duty of 25% on all parts produced outside of North America. This will include all parts produced in Europe, China and Taiwan. This order does not affect Canadian parts at this time.

If you anticipate needing parts, call us or look at our website to determine which parts this executive order will affect. To avoid the 25% duty rate, parts will need to cross into the USA prior to March 23rd, 2018, when the executive order will take effect.

Posted by: Tom_T Mar 14 2018, 06:20 PM

Mark -

That makes absolutely no sense for several reasons. I think RD is just trying to justify a 25% price hike via Trump.

First of all - as the quote correctly states, Canada is NOT subject to this 25% tariff yet, pending whatever they do with them & Mexico on NAFTA. So how are F they at all impacted by the RoW 25% tariff!?

Second - the tariff is only on processed bulk steel & aluminum - NOT on the end products, but even if RD imports steel from China - it goes directly to them in Canada, & not via the US - & there is no Canadian tariff on Chinese steel.

Third - The tariff is NOT on finished products like RD repair panels, & they're not using tariffed steel - so what is their production cost impact, with them being outside of the tariff zone of the USA!?

Fourth - even for producers of steel & aluminum products here in the USA - the cost increase of the raw sheet or ingot products of 25% is NOT a 25% increase of 25% of the final finished products, since the raw metals is only part of the production total costs. In most products made here in the USA, manufacturers are projecting a 5-17% total finished product price increase - depending on how much the other production costs & labor contribute to the total.

We get tracking of the costs of building materials weekly, & on the steel & aluminum products only are those 5-18% increases expected (a few as high as 20%) - mostly in the 7-12% range for structural steel, nails/screws/connectors. And the lower end of the range involves the switch to US Steel from Chinese/etc. steel - thus avoiding the 25% tariff induced increase.

So unless RD's products with prices to increase are both made in the USA & produced with foreign steel from the subject tariffed regions (i.e.: not from US made steel) & shipped from within the USA (Canadian Tariffs would add about as much if imported there, then shipped back to the US) ....

Then it's just RD's "Trumped up" price increase (pun intended), or else the owner's political statement against the tariff & Trump.

IMHO as someone trained in economics, broad tariffs are never a winning solution, & targeted tariffs or better yet, price controls - are a much better route to getting fair pricing from foreign producers. China charges a 25% tariff on US & Canadian cars, while the US only charges 2.5% (I don't recall Canada's tariff on them), & China dumps their steel & aluminum at less that production costs, & use questionable labor to start with - so even their production costs are unfairly low.

I think that RD's attempt at sneaking in a hefty price increase &/or as a retaliatory political statement will only hurt them in the long run, because they're punishing where they sell the bulk of their 356, 911/912, 914, etc. resto steel products.

I call BS on this one!


Tom
///////

Posted by: JOEPROPER Mar 14 2018, 06:36 PM

Well said.

Posted by: rhodyguy Mar 14 2018, 06:37 PM

Politics aside, why should they take a cut in pay? I get their side of it. They take in in the keester on stuff shipped to Canada.

Posted by: BENBRO02 Mar 14 2018, 06:47 PM

I want to comment but I can't do it without getting into politics. I don't want 914world.com to become political.

Posted by: BENBRO02 Mar 14 2018, 06:48 PM

with almost all of Tom T's post.

Posted by: Mikey914 Mar 14 2018, 07:08 PM

We move a lot of aluminum. Most of it is from the pacific northwest, we have seen about a 2.5% increase in cost, which is about double what we typically see in a year. The cost is the cost, but on a finished product most of the value is in the end product. A 2.5% cost for us is easily passed on in at less than a1% increase the customer sees.
I say the email. Thought I should bring in a bunch of RD metal, then realized it looks like it affects only a few parts at most.

Posted by: mepstein Mar 14 2018, 07:12 PM

I’m just passing along an email that was sent to me. Not making up RD’s policy. I would talk to them if you have any questions or comments.

Posted by: Mikey914 Mar 14 2018, 07:13 PM

Thanks for the heads up.
It really looks like this is not so much of an issue at least yet.

Posted by: The Cabinetmaker Mar 14 2018, 07:21 PM

I got the same email today, and thought the same thing as Tom. Makes no sense. Canada is still in North America.

Posted by: ablesnead Mar 14 2018, 07:53 PM

it appears to me , if the above information in Toms post is correct...that the policy is working as intended...

Posted by: 914_teener Mar 14 2018, 08:53 PM

It is not all correct.

I have a Minor in Econ.

...and it has been tried before. It lasted less than two years.

Posted by: MarkV Mar 14 2018, 09:04 PM

Pretty poorly worded email to send out to your vendors.

The first paragraph says that parts from Canada are not affected. The second paragraph says call because prices may be going going up 25%.

Posted by: 914_teener Mar 14 2018, 09:17 PM

And what would that intention be?


It will be a boon for companies making parts outside the U.S from foreign steel which will cause a proportionate increase because of the proposed duty when it crosses the boarder. Just as RD is saying, depending on what happens to NAFTA.

The proper way to increase manufacturing and production of steel in the country is to nationalize the mills if is is truly in our national defense interest.

That's the economics of it.

Posted by: r_towle Mar 14 2018, 09:23 PM

This is why we all need to move to Carbon Fiber parts!
Speaking of that, how are those CF bumpers coming along?

Posted by: Krieger Mar 14 2018, 10:49 PM

Fear is a sales tactic.

Posted by: porschetub Mar 14 2018, 11:00 PM

Hell not the most clever on here and can't work this out,someone pointed out that Canada is part of America so why would the guy with the big mouth and strange hair impose duty on anything MADE in the USA,thought his main aim was to strangle North Korea and area's near by.
Real outsider looking in so please correct me .

Posted by: injunmort Mar 15 2018, 05:41 AM

i call bullshit on the reason for price increases. RD can charge what the market will bear, their perrogative. but has nothing to do with trade policies of US/Canada. perhaps pete could chime in and embellish on this email.

Posted by: rick 918-S Mar 15 2018, 06:38 AM

Ya but not in the way it's being done now. It's a tactic by a negotiator not a politician. with Tom and Mark. Much to do about nothing.

Posted by: rmdinmd Mar 15 2018, 06:45 AM

What I read was they said it doesn't affect parts made in north America which would include Canada AT THIS TIME. so maybe they are preparing everyone for the POSIBILITY of it affecting them in the future and maybe some politics is involved with their email. They are also saying which date the duty kicks in but it shouldn't affect them at this time except for any parts not made by them (not saying there is) but sold through them.

Posted by: Edward Blume Mar 15 2018, 07:00 AM

As a student of economics (I don't do it for a living), I support a free market. A free market requires that everyone plays fair. China is not a free market. Whatever it actually is, you support it every time something you buy anything that has a "made in China" tag....much like supporting dead factory food by buying it and eating it. Demand will always fuel the supply. The problem is, we have quite a wage gap, that is expanding vs contracting. You either adjust the material side or overhead side, and I don't think my state is advocating a lower wage at this time, hence the shift to automation.

Posted by: mbseto Mar 15 2018, 07:27 AM

Well I was ready to be outraged, but I didn't get an email...

Posted by: cary Mar 15 2018, 07:58 AM

I just rolled thru the catalog. We're pretty lucky a lot our parts are made by RD.
But if you foresee a major restoration in the next couple years you should take note. Major items not RD. Some of these listed below might be from AA. But I'm fairly certain the first 3 are Dansk.

Battery Tray
Battery Support
Suspension Console
Both longs
Seat pivots
Lower firewalls
Both fresh air intakes
Inner long engine compartment
Front tow hook

Posted by: Mueller Mar 15 2018, 07:59 AM

Reading between the lines, they purchase material that will have the 25% tariff?

I do not see on their website where they source their raw stock sheet metal so if buying Chinese steel they will be paying more for it. correct?

Posted by: Edward Blume Mar 15 2018, 08:06 AM

No. Not unless Canada decides to put their own tariff on Chinese steel.

Posted by: Edward Blume Mar 15 2018, 08:07 AM

Restoration Design
24 Hayes Ave.
Guelph, Ontario N1E 5V5
Canada

Posted by: bdstone914 Mar 15 2018, 08:48 AM

Some of the RD parts carried by them are Dansk. You can tell most of them from the images where the parts are black not bare metal. Still not sure if that really impacts the finished Dansk part.

Posted by: dr914@autoatlanta.com Mar 15 2018, 08:48 AM

Restoration Design parts and prices are top quality and very reasonable, an increase in price will not stop us from purchasing them.

We make all of our sheetmetal parts in Michigan, and due to the theft of our tooling from the old restoration design guy bill frye, before Mike bought him out, there is some overlap with the parts made by Mikes new company, which of course in this small market is not good.

Mike has always been very fair, has had prompt delivery and strives to continue to expand his 914 offering. He deserves a bit of a price increase tariff or no tariff!

Posted by: Andyrew Mar 15 2018, 09:01 AM

All of the manufacturers in our industry are calling for a 5%+ increase in prices, and manufacturers with nothing but steel materials are calling from between 25 and 40% increase in cost.


I think they are just CYA until the actual numbers come in, in which case they will lower them back down to workable numbers.


Its a big hit for our company as we work on about a 5-10% profit margin and thus our profits for existing contracts will be nulled by these cost increases.

Posted by: peteyd Mar 15 2018, 09:03 AM

Tom,

We have done our research, there will be tariffs on finished parts manufactured outside of North America. We offer parts to our customers that are manufactured in Europe, Taiwan, and other places outside of North America.

Parts that are produced by us, and north American suppliers will not be affected.

Before you start pointing fingers and calling BS, I think you should get your facts straight. Dont be accusing RD of things that you dont even know.

We have been supplying the Porsche community with panels for nearly 10 years now. It is our goal to have superior customer service and this email was sent out to inform people of what the situation is concerning steel and aluminum products crossing the border.

All our steel coils has been purchased from a supplier in Michigan for the entire time we have been in business. Any other steel is sourced locally and made in North America.

We have several brokers that handle our shipments crossing the border. They have taken the time to read the bill carefully. They have determined that the 25% will be affecting finished product manufactured outside of North America

This was not a scare tactic, and honestly I am disappointing that people would think this.

Pete

Posted by: malcolm2 Mar 15 2018, 09:03 AM

https://us5.campaign-archive.com/?u=410d561165c653f79291e8f31&id=fcf73ee1f5&e=3b7a05b8e8

Thanks for keeping us informed.

Business is business. Prices go up, prices go down. As has been said, in a truly free market, the customer decides the price.

Let's hope the "tariff" decision is a negotiating tactic, so everyone will be ok.

Posted by: Mueller Mar 15 2018, 10:01 AM

That makes sense, unless their supplier is in the US and they purchase from China?

Posted by: gothspeed Mar 15 2018, 10:11 AM

100%

As was mentioned the cost of raw material is only a portion of the total cost of the finished product. A 25% tariff on raw stock if passed through 100% would increase the final price less than 25%.

Reminds me of some idiots on radio that because steel and aluminum from some countries was going to be tariffed at 25%. That meant the final cost of cars was going up directly by 25%. Pure BS and 'chicken little' political propaganda.

That said, if anyone wants to raise their prices they can do so. But using this tariff as an excuse for a direct 25% increase is less than honest. Just raise the price, no need for a fake excuse.

Posted by: Mblizzard Mar 15 2018, 10:39 AM

Sometimes I have trouble with the big words and have to sound them out because I went to a State university.

But when I read the email it seem clear that it never implied "all" parts were going up 25%. But as many have stated not all of the parts carried by RD are produced in north America.

Now as with all things written, there are better ways to phrase it that you just don't see until the second after you hit send.

Of course avoiding politics, but the reality is that the real impacts of what will happen is not completely know at this point. In the end it will be much more complex that a 25% change in price.

Posted by: rhodyguy Mar 15 2018, 10:56 AM

Structural steel has nothing to do concerning stamped automotive items manufactured from rolled steel imported from the States. RD is a bit, no offense, player in this senerio. Their market is small but they enjoy a relatively captive consumer base. Welcome to 2018. Things are what they are. Options? Few.

Posted by: MarkV Mar 15 2018, 11:01 AM

Email should have started by stating that the parts manufactured in house are made with North American steel and are not affected. Go on to state that some parts aren't made in house and may be affected by the tariff. The way it came across to me seems misleading and easily misunderstood.

Posted by: 914_teener Mar 15 2018, 11:27 AM

Must have been the same idiots that think there is a trade deficit with Canada.

Posted by: peteyd Mar 15 2018, 12:18 PM

I don't have time to sit here and debate with anyone that thinks they know what they are talking about in reference to these lovely tariffs that the US government are imposing.

Here are some answers to the questions we had. Also please read through the proclamations.

Can RDI ship finished products manufactured from Canada & Mexico Duty free as in the past? - yes

Is Aluminum from outside North America 10% Duty ?– yes, if it is classified as the tariff numbers below.
Is Steel from outside North America 25% Duty - yes, if it is classified as the tariff numbers below.

Can US parts still be shipped like before with no issues? - yes, but the Declaration of Foreign Shipper is still required at the time of entry for 9801.00.10 as usual.

Although we use the 8708.29 code, could this be tested for foreign parts being punched, steel, etc. like the codes below? – I would expect US Customs to start verifying the tariff number used on goods made of these metals through CF28 forms.

The links to the proclamations can be found here:

Steel: https://www.whitehouse.gov/presidential-actions/presidential-proclamation-adjusting-imports-steel-united-states/

Aluminum: https://www.whitehouse.gov/presidential-actions/presidential-proclamation-adjusting-imports-aluminum-united-states/

The tariff numbers impacted are here:
The proclamation has defined “steel articles” subject to the additional duties in the Harmonized Tariff Schedule as:

• 7206.10 through 7216.50
• 7216.99 through 7301.10
• 7302.10
• 7302.40 through 7302.90
• 7304.10 through 7306.90

The proclamation has defined “aluminum articles” subject to the additional duties in the Harmonized Tariff Schedule as:

• HTS 7601 - Unwrought aluminum
• HTS 7604 - Aluminum bars, rods, and profiles
• HTS 7605 - Aluminum wire
• HTS 7606 and 7607 - Aluminum plate, sheet, strip, and foil (flat rolled products)
• HTS 7608 and 7609 - Aluminum tubes and pipes and tube and pipe fitting
• HTS 7616.99.5160 - Aluminum castings
• HTS 7616.99.5170 – Aluminum forgings

Exemptions:

Currently the only goods, under the aforementioned tariff numbers, that are exempt are goods that were manufactured (not simply purchased from or shipping from) Canada, Mexico, and the United States.

These duties go into effect at 12:01 a.m. eastern daylight time on March 23, 2018.

According to the proclamation,

“Except as otherwise provided in this proclamation, or in notices published pursuant to clause 3 of this proclamation, all steel articles imports specified in the Annex shall be subject to an additional 25 percent ad valorem rate of duty with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018. This rate of duty, which is in addition to any other duties, fees, exactions, and charges applicable to such imported steel articles, shall apply to imports of steel articles from all countries except Canada and Mexico.”


The only new information to come out has been the assignment of the chapter 99 tariff numbers for the offshore steel/aluminum.

“The proclamations create new subheadings 9903.85.01 and 9903.80.01 for aluminum and steel products covered by the tariffs, as well as new notes to chapter 99 detailing the scope of the Section 232 actions.” ITT 3/14/18.

Pete

Posted by: mepstein Mar 15 2018, 12:41 PM

If I have to pay an extra $15 for a battery tray, so be it. Thank goodness RD (and other vendors) makes 914 parts.

Posted by: gothspeed Mar 15 2018, 01:53 PM

I can't argue with the above

agree, it is indeed a great thing these parts are being made. I have bought a few pieces from RD in the past

Posted by: ablesnead Mar 15 2018, 03:45 PM

my point in my reply , that was questioned by a few ...In toms thread , if it is accurate , he states that to minimize the total impact the 25% tariff would have on some businesses cost ( not RD ) , they have moved there fastener and similar purchases to American made products , the net cost increase is a substantial percent lower than 25% tariff.....suppliers buying domestic as opposed to off shore.....Tariff is working ..to some degree...

Posted by: Larmo63 Mar 15 2018, 04:33 PM

It seems like the real issue here is China dumping cheap, inferior, and below cost steel in North America in hopes of cornering and/or commanding the market.

I still bristle at the thought of the shitshow San Francisco Oakland Bay Bridge. I'm not being political, BOTH political parties had a hand in many BAD decisions in this case.

http://www.americanmanufacturing.org/blog/entry/dang-the-chinese-made-bay-bridge-continues-to-fall-apart

Posted by: gothspeed Mar 15 2018, 04:40 PM

Interesting and very telling. Thanks for posting link to the article!

Posted by: 914_teener Mar 15 2018, 08:09 PM

The bad decision were political to be sure and overode engineers.

Failures happen...usually because corners are cut by the politicians.

It is always about money and yes......I know what I talking about.

Posted by: Vacca Rabite Mar 16 2018, 09:31 AM

You guys may not realize it but RD also sells BMW parts - from Germany. They don't make them in house.

And, yeah, a 25% tariff on a $666 rear trunk pan for my 2002 kinda sucks.

And it sucks even more that the manufacture (W&N in Germany) is out of stock till summer. GRUMBLE.

Zach