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!

(IMG:style_emoticons/default/beerchug.gif)
Tom
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[JOEPROPER]

(IMG:style_emoticons/default/agree.gif) Well said.

[rhodyguy]

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.

[BENBRO02]

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

[BENBRO02]

(IMG:style_emoticons/default/agree.gif) with almost all of Tom T's post.

[Mikey914]

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.

[mepstein]

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.

[Mikey914]

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

[TheCabinetmaker]

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

[ablesnead]

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

[914_teener]

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

It is not all correct.

I have a Minor in Econ.

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

[MarkV]

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%.

(IMG:style_emoticons/default/popcorn[1].gif)

[914_teener]

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

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.

[r_towle]

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

[Krieger]

Fear is a sales tactic.

[porschetub]

Got an email from restoration design -

To all our valued customers, 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.

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 (IMG:style_emoticons/default/chair.gif) .

[injunmort]

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.

[rick 918-S]

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

It is not all correct.

I have a Minor in Econ.

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

Ya but not in the way it's being done now. It's a tactic by a negotiator not a politician. (IMG:style_emoticons/default/agree.gif) with Tom and Mark. Much to do about nothing.

[rmdinmd]

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.