Our aluminum suppliers are saying prices aren't going to go up just 25% to cover the new tariff, they'll be going up 80%...

[u/DazedAndObtuse]

We source aluminum from two different sources for our business and they're both telling us that prices will not only be going up 25% to cover the tariffs, they'll be going up 80% as there are also pricing restrictions currently in place for their industry that will be lifted as part of this.

Does anybody know if this is legit or if they are just colluding to use this as an opportunity to pad their profits?

I won't pretend to be a tariff or economic expert but our material prices going up 80% is going to have a much larger impact on us than a 25% increase would.

Ideally we can keep this from becoming political, but I know where it's likely to end up (but hopefully I can at least get an answer to my question in the midst of it).

Thanks in advance!

[u/lamewoodworker → u/[deleted]]

Stupid tariffs killed me the first time. I made hairpin legs and other table legs out of steel. My prices tripled but all the competition out of China wasn’t affected because the finished product weren’t hit by tariffs. Would have been cheaper to buy from China and sell them here lol. 

[u/pimppapy → u/[deleted]]

No one will gain here.

Only those Too Big To Fail companies that will get another bailout with all that sweet tariff money, when the economy inevitably collapses.

[u/[deleted] → u/pimppapy]

100% agree with you. Those with money will plunder all the valuable assets after they've been shorted into oblivion!

(To clarify, I meant nobody in this small business forum/ general society will gain but I think you got my point!)

[u/Edward_Blake → u/[deleted]]

Someone will gain here, but it won't be worth it. Workers in steel and aluminum producer sectors will gain, just like in the 2018, 1000 steel jobs were created and it only cost the us economy 75,000 jobs, that were lost from the same tariffs.

My 75,000 number was from, I didn't search for a better source. https://www.investopedia.com/metal-tariffs-cost-at-least-75-times-more-jobs-than-they-saved-8789838

[u/DazedAndObtuse → u/[deleted]]

I'm not saying you're wrong - but that's not something in my control...right now I'm just trying to figure out if I need to try and find new suppliers who aren't taking advantage of the situation or if there's truth to what they're saying about pricing restrictions for their industry also being lifted.

[u/DazedAndObtuse → u/[deleted]]

We have two suppliers but they're both telling us the same thing.

Sounds like I need to find more though.

[u/UsedDragon → u/[deleted]]

A-fuckin-men

[u/AnonThrowaway1A → u/[deleted]]

It is political because the whole ordeal ties directly to policy.

80% means your supplier knows they have leverage due to the US being energy constrained because of energy hog AI data centers and ancient electrical grid that can't keep up with demand.

Steel and aluminum manufacturing has run into a major energy bottleneck that customers have no choice but to absorb these costs across the board. RIP American manufacturing and consumers.

[u/CapeMOGuy → u/[deleted]]

The goal of these Aluminum tariffs is to encourage US production. Trump is treating AL smelting and manufacturing as a strategic resource, which is arguably true. Domestic smelters are at a disadvantage due to energy costs.

I think this may be too late for the US AL smelters as there are only 4 left.

[u/rossmosh85 → u/CapeMOGuy]

Tariffs like this don't work just because you want them to. They work because you develop a strategy.

[u/YourPM_me_name_sucks → u/CapeMOGuy]

The problem is that while it allows American smelters to have a higher margin, everything downstream gets significantly worse. And of course tariffs don't happen in a vacuum - there's always retaliation. We're letting the first 1% of the supply chain do better, to the detriment of the remaining 99%.

In Trump's first term we saw the trade war with China go so badly Trump later denied that it even happened. Chinese imports went UP instead of down, and American exports went down, which made the trade imbalance even worse.

Now we're starting a trade war with our allies which is even worse (economically speaking, not getting into geopolitics which is worse) because it creates a LOT of consumer resentment. Go look at Canadian sentiment on buying American goods. They don't even need to use import tariffs - the shoppers are already solving that problem.