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Thread: Tariffs and the industry

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    Jim Heffelfinger's Avatar
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    Tariffs and the industry

    With tariffs now looming large on key materials for not only experimental but all aircraft built in the USA - What is the reaction and response of the industry? Will the kitters have to impose higher prices on their products?

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    Jim Heffelfinger's Avatar
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    Wow, sure quiet on this thread.

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    Sam Buchanan's Avatar
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    Probably too soon to know what impact tariffs (that may or may not occur) will have on the kit industry.
    Sam Buchanan
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    Quote Originally Posted by Jim Heffelfinger View Post
    Wow, sure quiet on this thread.
    Jim, I didn't expect much here because this subject is 100% politics and we all know how our overseers feel about that.

    However, I will add the following caveat. Your omnipotent leader has proven to be exactly like the old refrain about the weather. If you don't like it, stick around for 5 minutes, it'll change. GUARANTEED!

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    Jim Heffelfinger's Avatar
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    Political today - more expensive tomorrow. Ripples to all of us. Caveat noted.

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    I have no facts but will offer an opinion. Of course tariffs will trickle into the economy as higher prices. However, my experience with working with metals in an industrial setting was that if I wanted metals that met specifications, I had to buy US manufactured. The cheap foreign metals usually had so many contaminates that they rarely met spec. The sad part of this is that the market is so flooded with cheap material from overseas, that some materials we needed were no longer manufactured in the US. All that was available was the cheap stuff from overseas which proved to be unusable in an industrial setting.

    Example: I needed to fabricate a new rack made of pure Molybdenum for a high temperature vacuum furnace used to heat treat various metals. Moly mesh is no longer manufactured in the US. Only available from China. Had to buy a case of the stuff to get the one sheet I needed. Once it arrived, I fabricated the rack I needed and ran one cycle in my furnace only to find the moly had so many impurities in it that it contaminated my vacuum furnace coating it with a dusting of Aluminum from the "pure" moly. I ended up scrapping the whole case of material as it was useless. It had close to 1% aluminum contaminate in the Moly, which would vaporize and coat the inside of the furnace at high temperature. From that point forward, everything that goes into that furnace would pick up a light dusting of Aluminum contaminates.

    How does that apply to aviation? We build planes with materials that meet manufacturers spec. I could be wrong, but I don't think a lot of the aluminum or 4130 we are using comes from overseas. Based on my experience in industry, if it did, I wouldn't use it.

    Those countries that were hit with tariffs are already charging us high tariffs to sell goods in their countries. So let's level the playing field. Free trade is only free when it's free in both directions. If our trade partners don't want a level field, then I would rather pay higher prices for quality products manufactured at home. In fact, you may find that with higher production numbers for US based manufacturing, the higher volume may equate to lower prices. That may be a pipe dream, but I'll hold on to that dream for a while.

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    Jim Heffelfinger's Avatar
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    Jim Heffelfinger's Avatar
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    I think it depends on amount and duration.

    If the change of the end cost to the kit supplier isn't huge, chances are they'll eat it. When they figure materials into a published price for a kit, they allow for wiggle room in the market.

    Certainly if aluminum suddenly dropped in price they're not going to immediately notify everyone of it and adjust overall kit prices; the same works in reverse.
    The opinions and statements of this poster are largely based on facts and portray a possible version of the actual events.

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    Harley Davidson and Mercury aren't in the aviation business directly, but they are part of EAA/Oshkosh and it feels like they are our roots. Harley has headquarters in Milwaukee and Mercury has their plant as well as a test lake right there in Fon du Lac. When I drive up from FLD to Osh each morning of the convention I pass Mercury right there beside the freeway.
    Anyway Harley says the new tariffs from China agiainst U S made motorcycles will cost them $90 million yearly, hard to believe but may be true. If they tried to pass this cost onto the buyers they say it would raise cycle prices by $2200 and hurt sales.
    I dont know the facts on tariffs. I have a degree in finance with a course in economics and my impression was that tariff wars hurt American consumers and most industries and are to be avoided. I dont think they have been a issue for most years and most Presidents.
    Sort of an aside, but most small pleasure boats, not ships, are still made here in America.
    Last edited by Bill Greenwood; 06-26-2018 at 11:58 AM.

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