A Look at the New Tariffs and their Current Impact on American Manufacturers
The new tariffs that have been either proposed or enacted by the current U.S. government administration have been a popular topic across the globe. Due to their direct and indirect impacts on raw material imports and some of the world’s largest industries (semiconductor and automotive), they’ve also had a significant impact on American manufacturers. And the uncertainty surrounding the full extent of these tariffs and what measures of retaliation will be enacted by other countries has only added more fuel to the fire.
The conversation about the new tariffs and their volatility is complex on any scale, which is why we’re going to look at their smaller impact–the ways that they’ll most likely affect small American manufacturing companies, businesses like KMK, and how that, in turn, affects all of our customers.
A Few Things to Keep in Mind
As we go through the tariffs, it’s important to remember first that each one is different and comes from a different motivation–so each tariff will have a different impact. And these impacts will affect certain parts of the manufacturing world more than others. Not to mention that even though several of the tariffs are in effect as of the publication of this article, not a single one is necessarily set in stone. While some tariffs are in effect, others are still in the planning stage or are in the middle of negotiations. And there is no guarantee that any of these tariffs will remain in effect, at least as of now.
So what is the most likely impact of the new tariffs on American Manufacturers?
The primary issue with the tariffs, even if their goal is ultimately to push for more reshoring of the manufacturing industry back in the U.S., is the general lack of infrastructure to support that new industry. That includes physical locations and equipment for the necessary manufacturing processes and the skilled workforce needed to perform those manufacturing processes. Retaliatory measures by other countries will only increase manufacturers’ prices, especially regarding raw material and component imports–hence why many tariffs are still locked in negotiations.
Smaller businesses, especially those with higher material costs, will most likely feel the effects of the tariffs the most. Smaller manufacturing companies are less likely to have automated processes than large companies and are less likely to have the capacity to absorb the additional fees set by the U.S. government and other countries.
However, while the new tariffs create challenges for manufacturers and fabricators across the board, especially smaller companies, manufacturers like KMK, who already have strong domestic supply chains in place, will be better positioned to handle any resulting volatility at a global scale. Service centers and distributors offering a stable and consistent supply will be crucial in this ever-changing environment, from navigating new cost structures to securing inventory to ensuring any procurement can be done as securely and consistently as possible.
Changes at KMK due to the Current Environment
KMK recently sent an announcement to our current clients that warned them of the changes due to rising material costs. We have personally seen a 25% increase in ferrous scrap prices since the start of the year, which is often a sign of strong demand and increased prices. As always is the case when price fluctuations occur, KMK does our best to let our clients know as soon as possible about any price changes, be it increases as is the case now, or decreases–which we always hope to see in the future. Current and potential clients are encouraged to contact us for any questions. Still, we will be quoting parts as orders are placed with current material prices.
The most important thing to do throughout all of these changes and this air of uncertainty is to stay informed. Having the right insights at the right time can always make a difference, no matter how big or small. Just like we’re keeping an eye on any changes with the new tariffs that might affect us and our customers, KMK will also do our best to keep our customers informed on any changes that we make in response.
About KMK
KMK is a metal fabrication company located in the heart of the U.S., offering a variety of sheet metal, wire, and tube fabrication services to our customers. Head over to our website to learn more about what we can do for you.
