25% tariff on imported steel!!? effect on knife prices

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Lapedog

Lapedog

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This is not a political discussion, so please keep politics out of it.

What is this going to mean for knife prices? Will American manufacturers be limited to using American produced steel on any knives produced in the US? Knife prices already seem to he raising far quicker than the rate of inflation.
 
Interesting... is this just saying that something like M390 will get a 25% tariff or that certain elements of 20cv will get a tariff?
 
I’m not sure what to expect. Probably everything will see a price increase.
 
Is it going to affect importing raw materials? Almost all of the Vanadium mined in the world comes from China, Russia, and South Africa.
 
I assume importing knives already made doesn't qualify. But would put a strain on m390, rwl-34 etc. With alternatives like 20cv and cpm-154 I don't see a problem.
 
Mo2 said:
I assume importing knives already made doesn't qualify. But would put a strain on m390, rwl-34 etc. With alternatives like 20cv and cpm-154 I don't see a problem.
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Are all components of 20cv and 154 found in the USA?
 
I don't know the specifics - I don't know if anyone (the administration included) knows the specifics. However, I wouldn't be all surprised if the small sheets of M390 that are imported for knifemaking have a different import classification than bulk steel for buildings, cars, etc. This might not affect knifemaking at all.
 
Going to have to look into this a bit more, the devil is always in the details... Will it affect raw materials or only produced goods?

Another example, let's say imported "vanadium" from Africa receives a 25% tariff, because it's imported, then ok, but what if a U.S. based mining company actually mines it over there and then ships it back state side for U.S. production, is it still considered an imported good under the tariff, or would they recieve a exemption?

My guess would be that it would mainly be affecting only produced raw goods like bar and flat stock, etc. and not affect the actual raw materials, in so that we will see a spike in U.S. steel manufacturing from Crucible, Carpenter, Latrobe, etc... that is typically the whole point of a tariff, but I could be wrong.
 
strategy9 said:
Going to have to look into this a bit more, the devil is always in the details... Will it affect raw materials or only produced goods?
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This was my first question. I wonder if this will affect the market for knives from overseas manufacturers like Victorinox and Mora. I further wonder if we will see changes from American companies using overseas materials and manufacturing.
 
Lapedog said:
25% tariff on imported steel!!?
This is not a political discussion, so please keep politics out of it.

What is this going to mean for knife prices? Will American manufacturers be limited to using American produced steel on any knives produced in the US? Knife prices already seem to he raising far quicker than the rate of inflation.
Click to expand...

Minimal impact. The cost of the raw steel is a small fraction of the cost of producing a knife.
Example:
One of the knife steel distributors sells a 1.5"x72" strip of 1/4" thick ATS34 for $90.
A knife with a 4" blade is going to require roughly 5" of that steel.
So a manufacturer can make 14 knives out of that piece.
That means the Raw Material Cost for the steel is $6.43 per knife.
After the tariff, the cost will be $8.03, an increase of $1.73. Add in the profit margin and percentage necessary to cover mfg overhead and the cost increase to the buyer will be ~$2.50.

minimal impact

And that calculation is on buying by the single piece. A larger manufacturer is going to pay less because he buys in larger quantities.
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I have been reading on this subject for the last couple of hours. Apparently, no one knows exactly how the tariffs will be administered, or even determined. As is with all things to do with trade it is quite a mess and enormously complicated. According to the NYT, there will be study groups that look at different countries and their metal exports and then will make a determination of what the percentage of tariff will be.

I couldn't find one thing about whether or not it applied to finished goods, goods that have a predominance of steel or aluminum in them, bulk raw stock, specialty metals or blends, etc. So I think at this point any ideas of how that will specifically affect the knife culture is just speculation.

My concern is that if (as this did under Bush the younger) goes to the WTO and found to violate international law binding fair trade, then other countries can retaliate as they see fit. So even if the tariff only affects raw stock, they can still raise prices on everything they sell (including knives) if this tariff is found to be illegal. I am more worried about the blowback and retaliation from the international community than the affects of the steel/aluminum tariff itself. The cost of our knives (of which many have just jumped in price a great deal) can go up exponentially because of trade tariffs on them imposed by other countries for any other grievances they might have, not related to cutlery.

If the tariff is applied to the steel, and only the steel and no other sanction/tariffs/fines/VATs etc. are considered it will be as Frank (knarfeng) says a simple arithmetic equation directly based exactly on the amount of steel or aluminum used in a particular knife.

I don't think it will be that simple and history has proven that it won't be. Most economists believe that this could get nasty for all of us that buy knives (and a host of other goods) not for a tariffs on the steel, but for the tariffs, sanctions, etc. that are sure to be launched on all goods as retaliation. I think a more realistic take on this situation would be if we put a 25% tax on steel coming into the United States from Germany, we might be able to expect a VAT (like England has) with a variable percentage of the value of the product, not its components like a steel blade or aluminum handle. In other words we might be looking at a 15% (or much more) tax on a finished knife (or more) rather than a tariff on one of its components.

Robert
 
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Need to keep this focused on knives only, else it will get moved or shut down.

edited to add:
To help that along, I have modified the title.
 
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Raw material costs is small compared to manufacturing costs.
Knives made from high performance stainless tool steels are expensive because it is a MOTHER to process, machine, and finish those types of materials.
 
To those asking about tariffs on Vanadium, I believe what was declared was a 25% tariff on imported steel and a 10% tariff on aluminum. (That means beer cans will be more expensive too!)

I had assumed it would have been a tariff only on steel itself. So I don’t believe iron imported to produce steel will be tariffed as well.

Hopefully it won’t happen and will all be a big nothing.
 
Personally, I think all imported, finished goods (alloys are finished goods inasmuch as they are not a raw material like ores) should be subject to a tariff that fixes any trade deficits with the country supplying them. For instance, china should pay us to take their metal, since we are swamped by their cheap, poisonous, disposable plastic goods and electronics and arent allowed to sell in their markets without enormous tariffs on our goods.
 
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