Effect of steel tarrifs

[Sleight]

How have the steel tariffs affected everyone in your corner of the industry? I have seen a lot of sub-contractors eat the cost of increased materials because they haven't been able to renegotiate pricing from contracts that were signed before the tariffs were even announced. Is that regional or nationwide?

[timebuilder]

Well I don't know about you, but I would not sign a contract that said I had to supply materials at a set price at some point in the future, not knowing what the material cost is going to be, without some sort of escalator clause in the contract.

[Sleight]

Well I don't know about you, but I would not sign a contract that said I had to supply materials at a set price at some point in the future, not knowing what the material cost is going to be, without some sort of escalator clause in the contract.

According to my customers a lot of GCs in the area won't deviate from their contracts to the subs and they don't include an escalator.

[HVAC_Marc]

I only guarantee my quotes for 30 days. I hardly think I'll go bankrupt because costs will rise a bit in that time.

[MT1]

I know sheet metal shops have been busy cranking out duct work due to the rise in prices. But that was like 2 months ago.

[DavidDeBord]

The Full Effect of the Tariffs hasn't really hit us yet.

Those with China, will begin in early July, & The "Twitter-in-Chief" has waffled several times over what he was going to do. But, ... if he gets Bull-headed, & increases the Tariffs on China, the Leadership in China is vowing to go "Like for Like".

The E.U., & perhaps even Japan, are joining in, as well as Canada & Mexico.

It's kinda like what was going on before 1929 repeating itself.

"In 2017, the U.S. posted a $375.6 billion deficit in goods with China. Most glaring is the huge deficit in computers and electronics, but the U.S. is a net importer from China in most market segments except for agriculture. The U.S. is excluding Chinese-made cellphones and televisions from its tariffs.

China has been a big buyer of American-grown soybeans and other crops. Planes made by Boeing BA, -1.25% also are a product in demand in China.

What happens next? Trump has vowed to increase tariffs if China retaliates, but the Chinese promised to return the favor. A trade dispute between the two largest economies in the world could result in lasting damage to the global economy if it metastasizes."


https://www.marketwatch.com/story/he...cit-2018-03-23

[timebuilder]

According to my customers a lot of GCs in the area won't deviate from their contracts to the subs and they don't include an escalator.

In that case, the need to find out why their counsel and accounting teams have not provided that guidance.

[timebuilder]

These are negotiating chips. The G7 and the Chinese will have some sort of conciliatory offer before the wheels come off. Why? Because they need those wheels even more than we do.

[DavidDeBord]

I understand what you are saying Time, & a great many believe as you do. But, the "This is America!" attitude is meaningless when We have "Leaders" in Washington that proclaim "We Feel Your Pain!", .... when it is those "Leaders" that have caused that Pain.

Russia & China are now "Tighter than two fleas on a Frozen Dog", politically, economically, & militarily. Both Nations have been pulling away from the dollar, & China at the least has been buying up Gold, that will back up it's Currency.

China is the Second Largest Economy in the World, & by many projections it will soon surpass America.

The G6 + 1 is making measures to cut down on their reliance upon America, & retaliate with their own Tariffs.

What is weird, is that All of these Nations, Allies & Enemies, now have a Common Bond with each other, at least in regards to $$$$ & Trade, & they collectively are Pissed Off at America.

Another "odd" recent occurrence is that China is now threatening to place Tariffs on America Oil & Gas:



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China surprises with threat on U.S. energy exports
China responded to $50 billion in tariffs imposed by U.S. President Donald Trump with a similar amount of levies on a variety of U.S. goods.REUTERS | June 16, 2018, 07:34 IST
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China surprises with threat on U.S. energy exports New Delhi: By Ayenat Mersie and David Gaffen

"Beijing surprised oil markets with threats to levy tariffs on imports of U.S. crude oil, natural gas and other energy products on Friday, just as China has risen to the top of the list of importers of oil from the United States.

China responded to $50 billion in tariffs imposed by U.S. President Donald Trump with a similar amount of levies on a variety of U.S. goods. But China also said it would impose tariffs on U.S. energy products, which analysts considered a surprise as previous tariff threats had centered on agricultural goods and automobiles.

"This is a big deal. China is essentially the largest customer for U.S. crude now, and so for crude it's an issue, let alone when you involve (refined) products, too. This is obviously a big development," said Matt Smith, director of commodity research at ClipperData."


https://energy.economictimes.indiati...ports/64609563
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All in all, I'm seeing this beginning to resemble the Economic situation of the Late "Roaring 20s".

I also firmly believe that Our so called "Leaders" both Republican & Democrat seriously Harmed America, by allowing our Industrial Strength to be moved overseas. Who woulda thought that the Geniuses in Our Government & at the Pentagon, would've allowed Chinese "Chips", & other technological materials to be liberally included in Our Military equipment.

[servicefitter]

When gasoline prices when to $4 a gallon companies tack on a sur charge. Contractors made extra monies from these charges. What do you think might happen?

[behappy]

It means that manufacturers can jack up their prices long before ANY material price increases.

[DavidDeBord]

These are negotiating chips. The G7 and the Chinese will have some sort of conciliatory offer before the wheels come off. Why? Because they need those wheels even more than we do.

Timebuilder, Without Fail, .. I Absolutely Hope that You are Right, BUT, ...... There are so many Factors involved in this, that I Believe that there is a "Fire smoldering in the Attic", so to speak, & the Majority of people in the House collectively decided to pull the batteries out of the smoke Alarms.

[DavidDeBord]

"As escalating frictions erode restraint on both sides, China even hinted that it could trim purchases of U.S. Treasuries -- an extreme move that would cause U.S. long-term interest rates to rise and disturb financial markets the world over. Beijing previously would have hesitated even to mention such a tactic.

China is "looking at all options," said Cui Tiankai, the country's ambassador to the U.S., in a March interview when asked whether Beijing might cut back on buying the debt in response to tariffs.

China serves as the biggest creditor to the U.S. with about $1.18 trillion in Treasuries -- around one-fifth of the total overseas holdings of the securities. Financial markets already are pricing in risk that the situation will worsen."

https://asia.nikkei.com/Economy/Trad...20Bird%20Brief