A well-known American politician has proposed "...tariffs of between 60% and 100% on Chinese goods..." If such a thing comes to pass, what might it mean for the mix of products offered by Spyderco? Just curious what y'all think might happen to our favorite brand of knives, if these tariffs become a reality. And, while we're at it, let's discuss what might happen to other brands also (in general rather than specifics, for the sake of shiny footprints). Seems to me that companies that have switched all their mfg to China will be at a disadvantage compared to Spyderco...but what do I know. It does seem that the Spyderco Golden expansion is well-timed.
(I've asked the question as non-politically as I can think to phrase it, and am making no value judgments or ideological statements above. Just curious what the future might bring for Spyderco, so get out your crystal ball...)
EDIT: There is an earlier thread on this topic from 2018, but maybe a fresh discussion is in order? To quote Sal:
A 60%, or more, increase to imported Chinese goods would definitely hurt the Byrd line in my opinion. I would expect Spyderco would start looking closely at sales & profit margins if the tariffs went through.
You also might see an increase in cost passed on to other Spyderco knives. While the knives may not be imported from China, some of the equipment used to manufacture them might use Chinese made parts.
Hello, I apologize if this is something y'all know already. I recall the last time this well-known American politician got into a trade war with China, it wasn't the same tariff % across all products. Different products have different rates. Depending on how Customs classify things, you could have diff rates for similar or related items. For example, fresh tomatoes, canned tomatoes, and ketchup could have different rates. I don't know if they do, just a hypothetical.
So if US hikes the tariffs on steel, there may not be a similar increase against finished folding knives. We just have to see which items get hit.
(I've asked the question as non-politically as I can think to phrase it, and am making no value judgments or ideological statements above.
Don't you worry about being afraid to politicize a particular subject. I'm your huckleberry. If I wake up tomorrow to find myself banned...well... that's the cost of trying to speak my mind. While I don't have a crystal ball either, and I can't read people's minds, I expect the tariff rhetoric is a warning of what is on the table if our trading partners are unwilling to negotiate. Since the Chinese are pretty smart folks, I expect there will be trade agreements that are equitable for all parties.
Normally I don't post links to other sites. If I can't say it in my own words, then maybe I should study the subject until I'm able to eloquently convey my thoughts. However, in this case I'll refer you to an article written by my favorite economist of all time. Not only was the dude smart, but he had the ability to write about complex subjects in a way that dirty knuckledraggers like me can understand.
The above article is sort of relevant to another active thread on The Forum. That thread is talking about the financial difficulties of Crucible. That makes me think of the current problems with U.S. Steel. A year ago they were trading at $36.50, which is what the market determined it was worth. Nippon Steel (evil foreigners) offered $55 a share. One would think that the beleaguered company and its stockholders would be eager for such a deal. Maybe. But the U.S. Government want's to quash the deal. They don't want the publicly held company headquartered in Japan to invest in a U.S. company, improving the equipment, the capabilities, the job security of the employees. The publicy held company headquartered in Japan wants to throw money at a company that employs Americans, but our government thinks that's bad.
I imagine Spyderco’s revenue from their imported knives will go down a bit and demand for USA made knives will go up, which will increase prices a bit.
Tariffs can be a useful tool but my understanding is tariffs alone just make things worse.
Re: US Steel deal, I don't really understand what the desired outcome is for the union. They say US Steel should remain American owned. OK but US Steel apparently can't thrive on its own. If US Steel sells to Cleveland-Cliffs, then Cleveland-Cliffs will have stronger negotiating power and the union becomes weaker, no?
I'm skeptical about Nippon Steel honoring all its promises. I'm just confused by how politicians and unions are all very confident that Cleveland-Cliffs will be a better owner than Nippon Steel.
Potential tariffs are a tool to bring the trade imbalance back to a normal balance. Even the threat of tariffs has an effect. We will have to wait until things become clearer.
In my opinion by not allowing Nippon Steel to buy US Steel you likely sign their death warrant. It’s a business decision and US Steel got themselves into this situation.
Walter E Williams was a brilliant economist. He did have a way of making things clear to anyone that listened.
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Tariffs potentially affect Japanese and EU products as well.
If tit-for-tat tariffs are imposed then knives sent into Golden from overseas for QC might have them imposed on each border crossing, hiking up prices and a negative effect on Spyderco’s import and export sales.
I think the topic of Nippon and US steel is separate from the topic of tariffs.
I have no issue with Chinese goods being more expensive. It will make it that much easier for me to buy American. But, that is actually the key point here.
If goods from tariffed country become too expensive, alternatives will emerge. Alternatively tariffed country shoulders the cost of the tariffs. Let’s not forget, US has the biggest consumer market in the world. They used to say that the customer is always right.
Maybe I haven't given this enough thought, but this stuff is currently very far down the list of things I worry about.
If this comes to pass in a way that's consequential for Spyderco, maybe it's an idea for them to reconsider if every knife has to pass through Golden for QC. That seems like something that should be very possible to outsource. For all I know this could even reduce the QC cost below what it is today, which again could strengthen the competitiveness of Chinese made Spydercos in EU and other non-US countries, and make up (somewhat) for lost revenue for these knives in the US.
Sure, Chinese-made knives will go up. But Chinese-made goods are so pervasive, almost everything is going to go up. Assuming the tariffs actually happen.
I purchased 6 Spyderco Knives over the last 30 days. Buy now or forever hold your peace.
Somebody merged two different subjects into one post, so I will address both.
The US Steel purchase is being blocked by the current administration because the USA and it's military needs to be able to produce steel for weaponry. It is a national security issue.
The well-known American politician that proposed "...tariffs of between 60% and 100% on Chinese goods..." had tariffs in place before exiting office in 2020. Then the current administration HIKED and EXPANDED the very same TARIFFS. What will happen is that if the cost to build the knives in the USA is cheaper there will be an increase in US employees building Spyderco knives, or a shift to a producer other than China.
High tariffs on China are excellent! If the CCP does not have money to make war, they will cool it in the South China Seas, not attack India / Taiwan / Japan / Philippines / Brunei / Vietnam...and quit selling chemicals to make fentanyl to the Mexican Mafia.
Now that you have the facts, go forth and discuss.
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There are so many costly regulations to contend with, which eliminating, would go a long way to dropping barriers to entry for competition and have a downward pressure on end consumer prices and provide better footing for increased US manufacturing.
When we hear the term regulation, understandably many of us think in terms of product and process safety. Indeed safety is how many regulation proposals are presented to lawmakers and regulating bodies.
What often happens is a company in a given industry will invest in a process or a manufacturing upgrade, then they themselves will take that to lawmakers / regulatory bodies and make a presentation on how making X without using that method or machinery or process is unsafe or otherwise problematic. They use that story to get regulation put into place that hampers competition via compliance costs, with themselves having already eaten the cost up front while able to afford it. Sink and oven size and make comes to mind for restaurants, as an example. My oven at home can make a pot pie but would be illegal to use at a local restaurant due to regulatory compliance; regulations put in place with the assistance of established restaurants.
I would imagine there are elements of this in the steel industry.
Hacking away at these types of regulations first, before slapping on tariffs, that we ultimately as consumers pay for, could go a long way for manufacturing within the US, possibly including the steel industry.
All that said, I haven't a clue what regulations are placed on the steel industry but thought it relevant food for thought.
High tariffs on China are excellent! If the CCP does not have money to make war, they will cool it in the South China Seas, not attack India / Taiwan / Japan / Philippines / Brunei / Vietnam...and quit selling chemicals to make fentanyl to the Mexican Mafia.
That’s certainly an interesting set of assumptions.
Sure, Chinese-made knives will go up. But Chinese-made goods are so pervasive, almost everything is going to go up. Assuming the tariffs actually happen.
If all that is done is add tariffs on Chinese goods then knife prices of every origin will go up. That’s just basic econ 101.
How much have prices of Chinese goods risen after the 2018 tariffs?
Can someone quantify?
That’s a difficult thing to quantify but it ramped to 25% which I assume in most cases is 25% of the wholesale price. Wild guess something like $5 on a $50 Chinese knife.
But the nominal price of imports is not the right way to evaluate a tariff. It’s far more complicated.
High tariffs on China are excellent! If the CCP does not have money to make war, they will cool it in the South China Seas, not attack India / Taiwan / Japan / Philippines / Brunei / Vietnam...and quit selling chemicals to make fentanyl to the Mexican Mafia.
That’s certainly an interesting set of assumptions.
No assumptions made, nothing but cold hard facts.
The Court at The Hague, Permanent Court of Arbitration, ruled against China and for the Philippines in 2016. Over the last 20 years China has attacked or used force against India / Taiwan / Japan / Philippines / Brunei / Vietnam...and sold chemicals to make fentanyl to the Mexican Mafia, which have killed over 100,000 Americans.
I Support: Second Amendment Foundation(SAF), Gun Owners of America(GOA), Firearms Policy Coalition(FPC), Knife Rights; The Dog Aging Institute, Longevity Biotech Fellowship, https://andrewsteele.co.uk/ageless/how-you-can-help/
How much have prices of Chinese goods risen after the 2018 tariffs?
Can someone quantify?
That’s a difficult thing to quantify but it ramped to 25% which I assume in most cases is 25% of the wholesale price. Wild guess something like $5 on a $50 Chinese knife.
But the nominal price of imports is not the right way to evaluate a tariff. It’s far more complicated.
