I work in manufacturing in an industry that only a handful of companies are involved in.
China is rapidly emerging as an extremely aggressive competitor.
The tariffs are absolutely becoming an issue for our business. It is scary in a sense, but right now, I think it is the right thing to do and something has to be done.
When the Chinese government will subsidize a major manufacturing facility, all equipment, and employee pay to the tune of 70-80% and then manipulate the currency, strangle raw materials (yes they own vast amounts around the world), OUTRIGHT STEAL and reverse engineer any product they can get their hands on, refuse to enforce non-Chinese company patents, and so on, we have to do something. And it isn't just the US, this is an ever increasing concern for numerous countries.
It is not a sustainable long-term position for the Chinese and they know that. But they can wreak mass havoc and hope to capture massive swaths of various industries so when they too have to start increasing prices to recoup, they will be in a position literally too big to fail.
As we all know and Sal is talking about, in the general consumer product market, it is extremely difficult to compete if you don't at least have some products coming out of China. Far too many consumers demand ultra-low prices and some retailers require price limits. When Buck Knives moved up here, there was a lot of talk about them bringing all production back to the new plant. But they couldn't because WalMart's price requirements just to stock a certain percentage of their product were so low that they had to manufacture in China. Leastwise that's what the owner said in an interview.
I guess the question I have Sal is, can your Chinese made products withstand the cost increase? It has to be largely a dedicated, targeted consumer group you're after with the budget and byrd lines and that is a pretty crowded field I would think. I think you guys do awesome and provide a quality product in those ranges and I'm always recommending a byrd of one sort or another to new knife folks. But if the cost jacks 20+%, will those customers till see the quality and have the perceived value that they do now when compared to other knives that might remain at the lower prices? It's really a rhetorical question, because I know it is a "we'll have to see" kind of a thing and maybe something you might not want to discuss.
Personally, I still think a byrd Robin at $25 vs. $20 is still an excellent value but a Tenacious at $75 might be a tougher sell.