Some replacement parts to increase in price Options

[mepstein]

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.

[Tom_T]

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!

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Tom
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