China & Tariffs

Sal Glesser

Sal Glesser

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As many of you know (or should now) that there are tariffs being created for many products made in China, as well as other countries. You also know that we make a number of products in China, including knives and sharpening parts. We're already experiencing these tariffs on some of the steels we import. Eventually we are going to be hit with up to 25% in tariffs for our Chinese made models. Naturally we will have to pass on those costs. I would like to know your thoughts on this?

sal
 
Do what you gotta do. It's a mean world we currently live in and you have to make a living as we all do. If everybody stays competitive, we as consumers can't complain too much.
 
Just my opinion and not sound advice by any stretch, but why not just stop making them? They are likely already priced as high as they will sell and adding more cost will probably keep them on the shelves. Spend that capital on building greater capacity in America. Open another manufacturing center here. Florida would welcome you. :)
 
The easy answer is to shift factories to a country that's not currently subject to the tariffs/dump duty.

For those knives in the value line a steep increase in price would be catastrophic.

I'm guessing Spyderco want's to maintain the relationship you've established with the folks who make the knives instead of finding a new partner. I am going to guess that a lot of the folks who pull the strings there are already looking for ways to maintain their competitive edge. Ask your partners what their plans are.

Those aren't the knives i buy so a price increase wouldn't seem to matter to me but I suspect that if the bread and butter sales flag the the springs and the cool steels I like will be forced to shrink also.
 
I'm somewhat in agreement with strange except potentially suspending to see if the tariffs stick (seems likely for a few years though)? I know other manufacturers with suffer the same fate. I do wonder if some of the other imports in that area, like Seki City or Taiwan, would be hit with the same tariffs. Of course, the challenge becomes that there is a lot of knowledge where you're already at for those knives.

I know we had a similar situation with Canada as we export a lot of food there and we ended up discontinuing several lines of products that were selling but not strong sellers where prices couldn't afford to rise and compete. Unfortunately, we just closed down a plant in Toronto but I think we are re-organizing to change that as it wasn't fully decommissioned yet, I think. It's a different division of the corporation and I don't do as well as I should trying to keep basic knowledge of the entire company's happenings since our division is having its own challenges.

I think if the Seki City, and Taiwan made knives stay the same price, no tariffs, and the Chinese ones increase in price then I don't see how they can compete as I already think the value is in the Japanese and Taiwanese made models if we don't want to spend over $100.

So, from someone who already didn't buy the Chinese made knives, I still wouldn't buy them if the price were higher. I'm not your target market in this scenario but I think adding another 25% on these is going to be a tough sell over some of your other offerings. On the brighter side, it will make some of the US-made models more appealing as the price gap will be reduced, assuming you have capacity to make these.
 
Does this also affect Taiwan as well as China?

I would suggest for the time being reduce the costs of manufacturing to keep prices in line. For instance the drunken... Avoid the expensive cnc time on the milling and use a steel that's less expensive.

For something like the Byrd line it may be harder to do this, and ultimately you'll have to pass on the costs. At this time going balls out on expensive manufacturering techniques may be a bad idea.

Maybe reduce map prices in the time being. As that's going to sell less knives overall. An increase of both the costs of knives and map pricing isn't going to be consumer friendly.

Is there a steel cheaper than s30v you can use an heat treat well to keep costs low? That could help overall.

Ultimately if you have to pass the costs on that's fine. Buying less knives will be a consequence of that. And that's not good for us fans or your bottom line.
 
Sorry to say this but most people in this Spyderco forum are over the China line of Spyderco . That won’t affect most of us . If the Taiwan line gets hit with 25% tariff Spyderco hasnto figure a way to make them 25% cheaper . We are talking $270 for a techno $190+ for the Sage line some serious increase .

Maybe manufacturing over sease and assembled in USA .
 
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I don't think I go for the Chinese models, however I love the Taichung designs. I truly hope this does not affect Taichung because those are already getting too pricey for me
 
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Sal Glesser said:
As many of you know (or should now) that there are tariffs being created for many products made in China, as well as other countries. You also know that we make a number of products in China, including knives and sharpening parts. We're already experiencing these tariffs on some of the steels we import. Eventually we are going to be hit with up to 25% in tariffs for our Chinese made models. Naturally we will have to pass on those costs. I would like to know your thoughts on this?

sal
Click to expand...

If I like the design I'll pay it. These import tariffs should have been present decades ago.
 
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no effect on my China Spyderco futures, but I'm just a consumer and it's just pocket knives...

however the economic butterfly effect concerns me a little...:confused:

but at this juncture, I support the tariffs and I'll continue to support them with my wallet...I hope they have the desired effect. :thumbsup:
 
There was a couple that came to the USA and set up a knife shop.Hired Americans to work for them .They have been growing at a good pace and build some pretty good knives. I hear they sell all they make.Anyone remember Chris and Ann Reeves .They came all the way to Boise Idaho to set up shop and have done ok.I think there might be a few more knife folks building knives here in Idaho.Something to think about. WB
 
Sal Glesser said:
As many of you know (or should now) that there are tariffs being created for many products made in China, as well as other countries. You also know that we make a number of products in China, including knives and sharpening parts. We're already experiencing these tariffs on some of the steels we import. Eventually we are going to be hit with up to 25% in tariffs for our Chinese made models. Naturally we will have to pass on those costs. I would like to know your thoughts on this?

sal
Click to expand...

Is there potentially a way to raise price across the board in order to subsidize the increased cost of material? I would only recommend it if the increase is minimal, say $20 max to the highest end knives and maybe 5$ mad to the budget knives.

People are already pretty upset about the fairly recent price hikes so I think any major increase in unit price will be met with alot of hostility.
 
@Sal how does that effect the steel imported here from say...Japan? I'd be glad to see the knives all made in the US and be willing to pay the difference if I like the design enough.
I do appreciate the cheaper line like the Tenacious and other such knives, but I'd still buy them if they were made from other steels similar to the RAT 1 and such.
 
It's easier to swallow a little at a time than taking a big pill all at once.
 
If the Chinese steel import tariff reduces demand for Chinese steel (for example 25 percent on knives and I think 50 percent in washing machines lol and assuming reduces consumer demand somewhat ) then doesn’t it follow Chinese steel prices will need to fall as well? I’m not in the steel trading business and I don’t know how you buy your steel on a prompt or (how far) forward basis but I’ve always been brainwashed that Chinese steel is in massive oversupply and finds a dumping price, much to everyone else’s discontent usually, because it undercuts everything else. Of course that’s a theory and doesn’t mean it needs to match the tariff but if the States is as big or as important a consumer as they say then it should drop a material amount? The question is how the steel buying contracts will match the timing of the steel price drops I’m assuming above. By the way I’m not an economist so take with a pinch of salt and feel free to pick holes in it. I’m genuinely interested.
 
is what it is. if it helps level the playing field for American made? more American made.....if you can find the workers who actually care and actually work..... to expand the made in usa lines......:)

wonder what your competition, also in China, are planning? guess we'll find out.....
 
Sal - I understand if raw material prices increase, the retail price of the the knife will also increase. That being said, if the cost of a ton of steel increases 25%, what % of the raw material increase is typically passed per knife?

For example, does a 25% increase in raw material increase the cost of a knife 1%, 10%, 25%?

I understand it probably isn't a simple answer but even a ball park number can illustrate the impact of the tariffs on consumers.
 
I don't blame you folks, but it makes me fairly unhappy. If prices increase, I'll buy fewer knives, just no way to get around that. It's been going that way for a few years now.
 
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