Effects of tariffs and other influences

[Brian]

Hey guys/gals:

I'm curious to hear what tariff-related effects (if any) folks are noticing in their businesses-is there any consensus among us folks here on the forum?

Knock wood, things are busy here, but I'm just a one/two-man band so I don't know how to read the tea leaves, so to speak. Over the years I haven't always been able to correlate our fortunes (misfortunes?) with how the world at large is doing, although I usually *feel* better when everyone else says that things are "great."

Thoughts?

[CNCAppsJames]

We have a few customers who lost work to the ChiComs... they are quoting that work again. Nobody can decide if the work is coming back or the companies are just kicking the tires for budgetary considerations. Lots of companies quoting a lot of work.

We shall see.

[Del.]

Mexican weed has gone sky high!

[CNCAppsJames]

Mexican weed has gone sky high!

How high?  

[mkd]

China's desire to not lose face in bowing down to Trump may very well keep the tariffs very high in their current state. The Chinese people can't exactly vote their dictator out of office.
 Sky high pricing on Chinese crap will only swell the US Treasury and investment on US soil... So we win either way. I might personally lose working for a foreign entity 🧐

[ghuns]

Before Trump's trade war, tariffs on the molds we have built in China was 25% for years. And we dodged some of that by splitting the POs 60/40 between build and design. Design was only a 10% tariff.

When the trade war kicked off, our lawyer advised against splitting the POs. His take was there would be extra scrutiny now and the savings didn't justify the risk.

Now tariffs on the molds we have had built in China have been fluctuating between 154-174%.

Our work has dropped off a cliff, as has our quoting.

I got two emails yesterday from the same customer telling us to stop all work on two molds. One is for a J4U(Jeep Compass), the other is for MQ BEV/ICE(not sure what that is). Both vehicle platforms are being put on hold due to tariffs. Both molds are complete, one is here, one still in China. Our customer will pay us, at least they have in the past. But as long as the programs remain on hold, they won't get paid by the automakers. They only get paid when the programs resume or are officially canceled.

Had another one cancelled a few weeks ago for GBEV-L(Stellantis electric platform), but this was due to decreasing demand for EVs.

We are keeping our head above water thanks to some work for a large appliance manufacturer that ships their molds from China directly to molding plants in Mexico.

[ghuns]

...Sky high pricing on Chinese crap will only swell the US Treasury and investment on US soil... So we win either way...

The moldmaking trade in this country was killed by the Big 3 automakers. They demanded Chinese prices for their tooling. Most mold shops closed. The ones that remain source tools from China and support them for the molders here.

We survived by doing that, but instead of building 50 molds per year, we now build 2 or 3. We keep the shop busy mostly with repair and EC work on the 100+ tools per year we source in China.

This model requires far less toolmakers. We have had 8 retire in the last few years. I am 52 and still on the younger side of the remaining toolmakers. There is an entire generation missing.

There is no way in hell this work is coming back to the US. Not a chance. Shops are not going to invest in training the tens of thousands of toolmakers we would need when it's very possible these tariffs will go away once Trump is gone. And even if they wanted to, where will they find the workers?

What will likely happen is that our Chinese shops will mothball their operations, buy into an existing mold shop in Vietnam and build tools there. Once the tariffs go back down, they will sell off their investment in Vietnam and go back to China. I don't see how that's a win for us.

[neurosis]

There is no way in hell this work is coming back to the US. Not a chance. Shops are not going to invest in training the tens of thousands of toolmakers we would need when it's very possible these tariffs will go away once Trump is gone. And even if they wanted to, where will they find the workers?

I don't know if you saw that Tim Cook video I posted not long ago that explained why Apple phones are made in China and why it's not likely that they will ever be manufactured in the US? It's more or less what you just explained right here.

[Newbeeee™]

I don't know if you saw that Tim Cook video I posted not long ago that explained why Apple phones are made in China and why it's not likely that they will ever be manufactured in the US? It's more or less what you just explained right here.

Yes, however....IMHO, this was and still is, a strategic decision by the owners - ie Fink (Blackrock mouthpiece) even admits it - "our job is to nudge changes"
Strategically, "they" (well above Fink the mouth) have wanted to manage decline in our countries, while building (taking control over) the far east. Greg mentioned Nam - maybe in our lifetime, maybe not, but they'll do it slowly to China next - the work will go to Nam etc, and ultimately to Africa.
Unlimited hands there who all want to chase the buck....

[Bucky Cornstarch]

Tier 1 supplier to commercial vehicles here.  Sales down 20% "directly due to tariffs." (Those are management's words, and they aren't libtards like me.) We have eliminated overtime, asked for voluntary layoffs, implemented furloughs at all levels, and key positions that have been vacated (operations manager is one that is really being felt) are not being filled.

[Smit]

Effects of tariffs and other influences....

A lot of people/countries in the world are just flat pissed that our President is lashing out at their countries without apparent reason. They would rather buy products that are not made in the U.S.A. and they are actively looking for other options.

Maybe in time some of the good will that has been lost will be regained but likely not all of it.

[gcode]

A lot of people/countries in the world are just flat pissed that our President is lashing out at their countries without apparent reason.

270%  tariffs  on US Dairy

[Smit]

Fact check: What Trump doesn't mention about Canada's dairy tariffs

[gcode]

Fact check: What Trump doesn't mention about Canada's dairy tariffs

did you actually read that before you posted it??

[Smit]

did you actually read that before you posted it??

Yep. Imports over the agreed upon amounts trigger the heavy tariffs.