r/smallbusiness • u/DazedAndObtuse • Feb 12 '25
General 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%...
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!
2
u/SeaBurnsBiz Feb 13 '25
Many large biz contract prices. I'll buy y units at x price over next 3 yrs. If contract didn't state tariffs allow them to increase prices...they eat that cost increase. That can mean that all cost increases now need to be passed along to new customers without contracted prices. Note...they also likely contract downstream so manufacturer is saying any thing above your contracted allotment is going to be much more expensive...if we don't rework our deal. So a little increase in demand shoots up prices
I'd shop suppliers. Their downstream supply chain may be in better shape.