On April 30th, Josh Smith of Montana Knife Company said you won't have to worry about tariffs if you buy American.
Last week, he realized his costs are going up bc he imports equipment and steel. And so do his suppliers.
IMO many people aren't aware of how much they import.
Last week, he realized his costs are going up bc he imports equipment and steel. And so do his suppliers.
IMO many people aren't aware of how much they import.
Genuinely not posting this to gloat, but hoping that people reevaluate how much of their life is connected to an international supply chain. Many small businesses, including artisans, will see their businesses shutter because of these tariffs, regardless of how they voted
Extremely long, but if you want to hear it, Josh breaks down the challenges he's facing. I hear similar stories in menswear (e.g., 3sixteen needing to import the best denim, which comes from Japan). All this now faces tariffs.
Glad I bought a Sebenza in MagnaCut before all this.
Glad I bought a Sebenza in MagnaCut before all this.
Just want to add a few thoughts for people who take the time to listen to Josh's clip above.
— Josh focuses on protecting finished goods, such as cars and, in his case, knives. So he wants a two-tier tariff system that allows people like him to import things without any tariffs, but then tariff finished goods (e.g., knives) so that he has less competition.
But what about American companies that make inputs? Why should he receive protection, but they don't?
— Josh also begins the clip by talking about how hard it is to boostrap a company when you're operating out of a garage. I agree! Shouldn't these small companies get every possible advantage?
If I come up with an idea and find that the best factory partner is in China or Sweden, shouldn't I be able to work with the best possible supplier to bring my idea to market? If my business grows, I can hire more Americans, just as Josh has with his company.
— Third, Josh recognizes that American consumers will pay more, even in his two-tier system. Under Trump's current tariff regime, he pays more for inputs (e.g., equipment, steel), which forces him to raise prices. This will cost the consumer. But even in his two-tier system, where only finished goods are tariffed, then consumer still pays more for the average product.
I've spoken with US-made menswear companies who fear that, as consumers see their cost of living rise all around them, they will have less money left over for MiUSA jeans, shirts, and shoes.
At the moment, the people who buy cheap imports aren't likely to ever buy MiUSA clothes. They are spending $20-50 for a pair of jeans. Getting them to buy a $250 pair of jeans (basically MiUSA) is very, very difficult.
The consumer who currently buys MiUSA clothing is a different type of consumer. They are a luxury consumer, but HENRY (High Earner, Not Rich Yet). If they start seeing the cost of living rise, they will be less likely to buy MiUSA clothes. Maybe where they bought two shirts and a pair of jeans every year, now they only buy one pair of jeans. That's less money for the MiUSA brand.
I strongly believe that it's foolish to give up the global market for the domestic market. Certainly, we should tariff certain things (e.g. key industries). But most things shouldn't be tariffed, especially clothes. Instead, the government should use other industrial policies to move Americans up the value chain.
That can mean investing in human capital (e.g., job training) to move people from making simple t-shirts to complicated outerwear. It can mean subsidizing technology investments. Or giving small businesses grants so they can go overseas to buy a booth at a trade show. In this way, we move US manufacturing up — putting them as leaders in high-end clothing, such as luxury outerwear, suits, knitwear, etc. And get the global market to buy.
The average Italian doesn't buy high-end Italian suits, just as the average French person doesn't buy luxury French leather goods. Yet, these are robust industries within those economies. The US should aim to develop industries in this regard, not this blunt forced tariff policy to move all the manufacturing here, so that Americans are making crappy t-shirts and selling them to each other for $30.
— Josh focuses on protecting finished goods, such as cars and, in his case, knives. So he wants a two-tier tariff system that allows people like him to import things without any tariffs, but then tariff finished goods (e.g., knives) so that he has less competition.
But what about American companies that make inputs? Why should he receive protection, but they don't?
— Josh also begins the clip by talking about how hard it is to boostrap a company when you're operating out of a garage. I agree! Shouldn't these small companies get every possible advantage?
If I come up with an idea and find that the best factory partner is in China or Sweden, shouldn't I be able to work with the best possible supplier to bring my idea to market? If my business grows, I can hire more Americans, just as Josh has with his company.
— Third, Josh recognizes that American consumers will pay more, even in his two-tier system. Under Trump's current tariff regime, he pays more for inputs (e.g., equipment, steel), which forces him to raise prices. This will cost the consumer. But even in his two-tier system, where only finished goods are tariffed, then consumer still pays more for the average product.
I've spoken with US-made menswear companies who fear that, as consumers see their cost of living rise all around them, they will have less money left over for MiUSA jeans, shirts, and shoes.
At the moment, the people who buy cheap imports aren't likely to ever buy MiUSA clothes. They are spending $20-50 for a pair of jeans. Getting them to buy a $250 pair of jeans (basically MiUSA) is very, very difficult.
The consumer who currently buys MiUSA clothing is a different type of consumer. They are a luxury consumer, but HENRY (High Earner, Not Rich Yet). If they start seeing the cost of living rise, they will be less likely to buy MiUSA clothes. Maybe where they bought two shirts and a pair of jeans every year, now they only buy one pair of jeans. That's less money for the MiUSA brand.
I strongly believe that it's foolish to give up the global market for the domestic market. Certainly, we should tariff certain things (e.g. key industries). But most things shouldn't be tariffed, especially clothes. Instead, the government should use other industrial policies to move Americans up the value chain.
That can mean investing in human capital (e.g., job training) to move people from making simple t-shirts to complicated outerwear. It can mean subsidizing technology investments. Or giving small businesses grants so they can go overseas to buy a booth at a trade show. In this way, we move US manufacturing up — putting them as leaders in high-end clothing, such as luxury outerwear, suits, knitwear, etc. And get the global market to buy.
The average Italian doesn't buy high-end Italian suits, just as the average French person doesn't buy luxury French leather goods. Yet, these are robust industries within those economies. The US should aim to develop industries in this regard, not this blunt forced tariff policy to move all the manufacturing here, so that Americans are making crappy t-shirts and selling them to each other for $30.
kind of funny that josh's argument basically breaks down to:
"I think it's in our national interest if we don't tariff the stuff that I personally buy, but we place tariffs on my business competitors."
yea, no shit dude. and i wish I had a million dollars to buy a home
"I think it's in our national interest if we don't tariff the stuff that I personally buy, but we place tariffs on my business competitors."
yea, no shit dude. and i wish I had a million dollars to buy a home
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