Shars Price Increase

[Winegrower]

We can see the future from here...

 

[JimDawson]

The questions that I have are, is the tariff based on the cost of the steel content in the product or on the total cost of the finished good? If the latter, how much steel must a product contain before it is considered a steel product?

An AXA tool holder, for example, may have $1 worth of steel but $20 worth of value added as machining.

While what you say is correct as far as material content of the tool, the tariff list specifically includes machine tools and tooling. I saw the whole list somewhere but I can't find it now. Includes both CNC and manual machines. Not sure what the tariff rates are.

To comment any further on this would require to getting into the politics of it, so I'm not going there.

 

[projectnut]

So they are increasing the retail prices before the supply price increases.
Sounds like an excuse for a money grab to me.

This is quite common. Rather than have to dig deeper in their own pockets to pay for price increases companies raise their prices in advance so the cash is in hand when it comes time for them to make the next purchase. Keep in mind they probably order $100,000.00 worth of parts at a time. Having to come up with another $25,000.00 out of pocket would seriously impact cash flow.

 

[higgite]

This is quite common. Rather than have to dig deeper in their own pockets to pay for price increases companies raise their prices in advance so the cash is in hand when it comes time for them to make the next purchase. Keep in mind they probably order $100,000.00 worth of parts at a time. Having to come up with another $25,000.00 out of pocket would seriously impact cash flow.

And they figure it's better to impact my cash flow than their own.

Tom

 

[macardoso]

The questions that I have are, is the tariff based on the cost of the steel content in the product or on the total cost of the finished good? If the latter, how much steel must a product contain before it is considered a steel product?

An AXA tool holder, for example, may have $1 worth of steel but $20 worth of value added as machining.

I believe that Shars buys a portion of their finished goods directly from China, so the tariff affects the purchase price of the goods directly.

 

[RJSakowski]

The latest harmonized tariff schedule is here. https://hts.usitc.gov/current
It is effective August 1, 2018. Sections of interest to machinists would be found in Section XVI, Chapter 84, pp 67 and later. For reference, here is the schedule for 2017. https://hts.usitc.gov/view/release?release=basicCorrections2

 

[middle.road]

Actually you have to admit that it was a decent move to notify their customer base of the anticipated increases.
I haven't received any messages or seen any notifications from other suppliers...

In early July the cargo ships were racing to get loaded in China and underway before the tariffs took affect. So the September time frame makes perfect sense. This would coincide with the next shipment coming in and as noted by ProjectNut in post #13 above, the cost increase due to the tariffs will amount to a rather substantial amount of money.

It is not a 'money grab' by any stretch of the imagination, it is standard business practice.
If you had a business that sold a great deal of imported goods would you absorb the cost of the tariffs?
The cost of these tariffs are going to be borne by the end users, large and small, and ultimately the end consumer will absorb the final costs.
It is basic economics 101, costs are always passed on.

It is a global economy now, the time has come to adapt and change, even though change is difficult.