Potential Tariffs & Golden, CO.

[PMBohol]

It’s a complicated situation. The mere mention of tariffs has already started changes in certain countries. Production being shifted to other countries for example. Apple is shifting production from China to India and other places. It takes time of course.


There is also the question of the sum of the parts. Made in the USA is better stated as Assembled in the USA. For a knife company for example, someone else makes the steel. Where do the raw materials come from or the steel itself? Then there are screws and washers and all sorts of parts that maybe other companies are producing for the knife company. Think about something more complicated like large appliances, automobiles etc and it is mind boggling. How much Chinese stuff is in the Ford or GM you bought that was built in the USA?

It’s mind boggling.

[dj moonbat]

Looks like knife buying is going to have to be highly selective for the next few years.

[Hopsbreath]

China 34%
EU 20%
Japan 24%
Taiwan 32%

Looks like that Stretch XL I bought from Dack shipped just in time and will likely be the last knife I buy for a while.

[SpeedHoles]

Big ouch.

[Bolster]

On the bright side, this could mean more stimulus for local manufacturing.

[CDEP]

JP Morgan today said that these tariffs were not factored in to their current guidance, and that if they remain in place they are likely to plunge not just the US, but the entire global economy into recession.

The price of our knives is not going to be our biggest problem.

[Nestor]

Just for clarity tariffs on products are paid by the importer not the country they were made in, then those increases in cost usually passed on to the consumer. Blanket tariffs would effect not just completed knives but any imported parts or materials that make up a US made knife or accessory.

I don't think that too many Americans do understand that actually. They see 20% or 50% and think that Europe or someone else will pay all of it...but then comes the surprise. They won't. I'm witnessing that phenomenon on different forums and there is a huge enthusiasm for the idea (which I am not really going to discuss here), but what goes with that is the very strong belief that all those countries out there are going to pay all those tariffs. Ohh...well

[xceptnl]

Laws and interpretation are somewhat subjective as every business has a different model. From what I understand up to this point, is that countries who import to the US pay the tariffs IF they do not have an established US entity. I am purposefully using the word entity to be vague. Our current business is a US startup of an established UK business. We have been in the development of the plans for years now. As we understand from our lawyers, we will not be paying tariffs. Just to give everyone some perspective. I am sure Sal and the team also have looked into this as they do business on so many continents.

[wrdwrght]

But what do you think of my comment that the Golden expansion was well-timed? Agree, disagree?

Is Spyderco in a stronger competitive position with most other out-sourcing knife companies because it has expanded its USA-based manufacturing? I'm thinking yes, but maybe there's another perspective?

If a recession is coming (I suspect it is), discretionary funds for knife purchases are liable to shrink, what with all of DOGE’s firings and grant-cutting, and with all the inflation and layoffs American tariffs will bring home as cost-hikes for end-consumers to pay.

In such circumstances, I don’t see what will encourage Spyderco to crank up Golden’s newly expanded capacity.

Apart from a cooling of national demand, what will be the affect on international demand for Spydercos of foreign tariff retaliations? Spyderco is already pricey in Europe and has been for a while.

Add to this, will steels Spyderco has stockpiled carry the company beyond the coming crunch, especially with Crucible’s bankruptcy.

And, with “Liberation Day” just yesterday, don’t European and Japanese steels face American tariffs today?

What is the adage attributed to Hegel? “What we learn from history is that we don’t learn from history.”

[SpeedHoles]

Laws and interpretation are somewhat subjective as every business has a different model. From what I understand up to this point, is that countries who import to the US pay the tariffs IF they do not have an established US entity. I am purposefully using the word entity to be vague. Our current business is a US startup of an established UK business. We have been in the development of the plans for years now. As we understand from our lawyers, we will not be paying tariffs. Just to give everyone some perspective. I am sure Sal and the team also have looked into this as they do business on so many continents.

This post is probably tipping too political for this forum, which I usually avoid, but since these things will hit me directly, why not discuss...
What you're saying according to your lawyers is that "we will not be paying tarriffs" - When you say "we", you are referring to you in regards to the business employee/owner/operator? But the end consumer would pay the tarriffs, so "we" as in buyers would pay that increase. That is how I am understanding much of this.

For example, say GM or John Deere - their Mexican or Canadian manufactured products - then what?
Wasn't a lot of this to stop that from happening, and in a way to penalize outsourcing? It wouldn't have that effect if they don't pay tarriffs, just if their entity is based here, it would still be advantageous for them.
Or since the end buyer would pay the tarriffs and not GM/John Deere, it'll shunt sales, and that is the penalty to the manufacturer?

[Wartstein]

I think we should stick to the forum rules and keep political opinions and preferences out of the discussion - ?

That said:

As far as I understand, purely economically speaking it does not matter who technically pays the tariffs:

IF such tariffs are in place, foreign products just have to get more expensive for the consumer/company in the US who imports them..

Let´s say Spyderco imports a knife part from a company in Europe:
- The European company calculates their manufacturing and labor costs and their margin and makes Spyderco a good price so that both "can live"
- With those tariffs in place the European company just has to go like: "Well ,on top of what we calculated, NOW we have to pay 20% tariffs, and so we have to charge Spyderco more than before"... consequently the parts get more expensive for Spyderco and they have to raise the price for the whole knife...(and this is true for more "basic" stuff like food too).

I figure part of the plan with those tariffs exactly IS that US companies and consumers will start to buy more purely US made products, and in the long run more products ARE produced in the US and not imported, cause the latter gets to expensive.....I have no idea if this will work out or not.

/ Another thing is:
At least the European union has said already that as a reaction they will install counter tariffs for products imported from the US to Europe.
So US products will get more expensive here.
Which probably means Spyderco and other US companies will sell less products in Europe - also at least in the short run probably not the best thing for the US economy, especially since with most countries the US IMPORTS more than they EXPORT...?

Just my complete layman view of course (could be totally wrong) and no political opinion stated here.

[fixall]

Laws and interpretation are somewhat subjective as every business has a different model. From what I understand up to this point, is that countries who import to the US pay the tariffs IF they do not have an established US entity. I am purposefully using the word entity to be vague. Our current business is a US startup of an established UK business. We have been in the development of the plans for years now. As we understand from our lawyers, we will not be paying tariffs. Just to give everyone some perspective. I am sure Sal and the team also have looked into this as they do business on so many continents.

I don’t understand what you’re saying.

I run a U.S. based knife supply business. I source my materials from U.S. suppliers when I can. Sometimes pricing, or lack of a U.S. equivalent material leads me to order from overseas suppliers. As a U.S company, the tariffs are absolutely paid by me, and not the manufacturing company/country (and I have the receipts to show it). Before the material is released by customs, I’m required to pay the tariffs, otherwise it is sent back to the country of manufacture. That cost is passed on to my customers. There is no other way to do it, as I do a flat percentage markup, which allows me to offer the lowest possible prices.

Let me give you two real world examples.

I sell glass composite/durostone (different than g10). There is a U.S. manufacturer of it, but it costs roughly four times as much as its overseas counterparts. Store sales have quickly shown that my customers are rarely willing to spend the extra cost for the U.S. made material. Understandable considering the price difference. Material costs, labor costs, the clean water act, and a plethora of other things make it difficult to produce cheaply in the U.S.

Let’s say I buy $1,000 of the overseas made glass with a tariff of 20%. That increases my costs for the overseas glass to $1,200. The U.S. made stuff is $4,000 for the same amount, so it still makes sense to purchase the overseas made stuff…. And would continue to make sense even with a 100% tariff. Not many of my customers are willing to pay three times as much for the same material based on point of origin.

I typically take the $1000 divided by the number of scales sets I get, add my markup, and that’s what my customers pay. With the tariffs, I am dividing $1,200 by that same number of scales sets before I add my markup, leading to an increase in costs of at LEAST 20%.

Assuming glass sales stay the same, the only things the tariffs change in this case is that the U.S. government gets more money, my business gets more money, and the U.S. consumer spends more money.

Another example is Fatcarbon (which is made in Lithuania). There is only one manufacturer in the U.S. that I’m aware of that makes a similar product…. And they have no interest in providing materials to dealers (I’ve checked). The price I pay for my shipments of Fatcarbon has already increased significantly.

My suppliers of U.S. materials have also said they would be raising prices on my next contract. While they make their materials in the U.S., some of the components for their resins are sourced overseas.

[CDEP]

Tariffs are paid by the company doing the importing into a country with a tariff. The cost from the exporter doesn't have to change. The importer pays the tariff fee to, in Spyderco's case, the US Treasury. It is then up to the importing company to decide if they want to pass the extra cost on to their customers. It is usually not economically feasible for them not to do this.

So, the US treasury collects the tariff money, and the consumer pays for it through increased prices. It is effectively a tax. We pay for it. The US government gets the money.

If the countries that are targeted by US tariffs decide to retaliate, then the cost of US exports goes up for the foreign consumers. So, Spydies sold in nations with retaliatory tariffs get more expensive and sell fewer units. This is often referred to as a trade war. This can then drive up costs in the exporting countries, so now the pre-tariff cost of the Chinese, Japanese, or Taiwanese knives also goes up.

The US import tariffs announced today are blanket, global tariffs. If they go into effect and obtain for the rest of the year estimates range from 3,500.00 to 5,000.00 per household in increased costs. What will that do to the discretionary spending we do on things like our Spyderco hobby? I know it will put a serious dent in my budget.

What about American-made knives? If they use any materials that are imported, the costs will also go up. All particle steels are now made in Europe (and maybe soon in China), so the costs to Niagra will go up and be passed along to Spyderco. Same for steels like 14C28N, or any Alleima steels. Today's tariff for the EU was 20%

It would take years and billions in investment for US companies to replace foreign manufacturing. So that argument is meaningless in the short term. And since these tariffs could be removed in '26 or '28 with a change in control of the US congress and/or White House, no US company is likely to take that risk and spend billions only to see tariffs removed and foreign competition destroy them.

Congress can put a stop to all of this. They have already voted, on a bipartisan basis, to cancel the Canadian tariffs. They can also vote to remove emergency authority from the POTUS to imposed such tariffs. Will they do so? Time will tell.

This can all play out many ways, but it is hard to imagine how we won't be paying more for *all* knives in the very near future, and for at least a few years. The last time the US tried tariffs like this, the Smoot-Hawley Tariff Act of 1930, it worsened the Great depression, as president Reagan pointed out back in 1988.

But hey, if you were thinking of dropping a few grand on a Shiro, one country not on the tariff list was...
Russia.

[Wartstein]

...
I don’t understand what you’re saying.

I run a U.S. based knife supply business. I source my materials from U.S. suppliers when I can. Sometimes pricing, or lack of a U.S. equivalent material leads me to order from overseas suppliers. As a U.S company, the tariffs are absolutely paid by me, and not the manufacturing company (and I have the receipts to show it). Before the material is released by customs, I’m required to pay the tariffs, otherwise it is sent back to the country of manufacture. That cost is passed on to my customers. There is no other way to do it, as I do a flat percentage markup, which allows me to offer the lowest possible prices.

Let me give you two real world examples.

I sell glass composite/durostone (different than g10). There is a U.S. manufacturer of it, but it costs roughly four times as much as its overseas counterparts. Store sales have quickly shown that my customers are rarely willing to spend the extra cost for the U.S. made material. Understandable considering the price difference. Material costs, labor costs, the clean water act, and a plethora of other things make it difficult to produce cheaply in the U.S.

Let’s say I buy $1,000 of the overseas made glass. With a tariff of 20%. That increases the costs of the overseas glass to $1,200. The U.S. made stuff is $4,000 for the same amount, so it still makes sense to purchase the overseas made stuff…. And would continue to make sense even with a 100% tariff. Not many of my customers are willing to pay three times as much for the same material based on point of origin.

I typically take the $1000 divided by the number of scales sets I get, add my markup, and that’s what my customers pay. With the tariffs, I am dividing $1,200 by that same number of scales sets before I add my markup, leading to an increase in costs of at LEAST 20%.

Assuming glass sales stay the same, the only things the tariffs change in this case is that the U.S. government gets more money, my business gets more money, and the U.S. consumer spends more money.

Another example is Fatcarbon (which is made in Lithuania). There is only one manufacturer in the U.S. that I’m aware of that makes a similar product…. And they have no interest in providing materials to dealers (I’ve checked). The price I pay for my shipments of Fatcarbon has already increased significantly.

My suppliers of U.S. materials have also said they would be raising prices on my next contract. While they make their materials in the U.S., some of the components for their resins are sourced overseas.

Pretty much what I (as a total layman concerning that matter) thought... those tariffs just have to make imported stuff more expensive in the US (to be clear: I am European).

And most likely also products actually made IN the US, if they still use some imported parts / materials...

Which consequently, on top of the "counter-tariffs" that at least European countries have announced already, make US products imported to other countries more expensive there (so for example Spydies in Europe...)

If in the long run also good outcomes are possible is something I can´t tell.

[Wartstein]

.....one country not on the tariff list was...
Russia.

Interesting...
Was not aware of that.

But discussing it would probably mean discussing politics, not the right place for that.

[WilliamMunny]

Unfortunately it’s a lot of speculation, experts can’t even agree on the impact. I am usually a stay and hold investor, but with the money I have recently lost in my retirement account I am regretting that.

On the good side I know Spyderco will do what it can to keep prices as low as possible while still ensuring its workers get paid. I know I for one will be buying at least one Spyderco this year to keep supporting Sal and the employees at Spyderco. I am sure all their employees are nervous between the market, talk of recession, crucible bankruptcy and now tariffs.

[Flash]

With the decline of Golden QC and another guaranteed and sizeable price hike, I’ve come to the realisation I actually have quite a good collection of knives already, so probably won’t be buying too many more on a whim from now on.
I predict the upcoming 15v Native 5 will be my last for a while.

Chin up though, it could be worse - we could be into Benchmades.

[MrGibson]

But hey, if you were thinking of dropping a few grand on a Shiro, one country not on the tariff list was...
Russia.

No comment on the economics or politics, but there’s context to this about Russia (and also North Korea, Cuba, and Belarus) from The Hill:

A White House official told The Hill in a statement that the four nations “are not subject to the Reciprocal Tariff Executive Order because they are already facing extremely high tariffs, and our previously imposed sanctions preclude any meaningful trade with these countries.”

(From an article by Alex Gangitano published today).

[Mk-211]

Every steel that people want, can be made in America. We have the resources to make everything here.

As has been said many times, steel manufacturers want to sell tons. Steel for knives makes up a minor amount.

Keeping Crucible open, could've been a way around tariffs.

[SpeedHoles]

Every steel that people want, can be made in America. We have the resources to make everything here.

As has been said many times, steel manufacturers want to sell tons. Steel for knives makes up a minor amount.

Keeping Crucible open, could've been a way around tariffs.

Carpenter still exists, but for some reason they don't seem to agree. Otherwise they'd probably be doing just that...
Probably a lot more at play than we can see on the ground level.