With the recent imposition of a 10% tariff on goods coming from China, it remains to be seen how both manufacturers and distributors decide to pass along these cost increases to the trade as well as the consumer in both the near- and long-term. In my opinion, most will take a wait and see attitude over the next few weeks to see if these tariffs will either be rolled back or remain in place based upon China’s reaction. Bear in mind, its entirely possible that not only will the tariffs remain in place but they could increase further should the Administration feel it necessary to raise the stakes even higher if China doesn’t get the subtle message or decides to retaliate in kind. During his presidential campaign, Trump had threatened a 60% tariff so now that he’s in office anything and everything is on the table. Presently, its not clear if certain manufacturers — among them Hobby Master, Panzerkampf and a few others — will be affected by the tariff and whether or not companies operating outside China will pick up sales by being located outside the PRC.

Its entirely possibly that the new Administration will up the stakes even further by placing an across-the-board tariff on every country that currently does business with the US, all in an effort to demonstrate to the world that we mean business when it comes to concessions. Over the weekend, both Canada and Mexico, our nearest neighbors and close allies, saw a 25% tariff imposed upon them, so it isn’t a stretch that even more allies will get the same treatment should Trump feel its within his rights to push the bounds even further.

So, as we start 2025, things aren’t looking especially great in the commercial space unless something substantial occurs by one or both parties. Geo-political events being what they are, it could be a situation where one side is waiting for the other to blink before they can formulate a response to the US initiatives. It isn’t a pretty scenario and one that will undoubtedly lead to a scarcity of product and higher prices for what does come into the country.

With President-Elect Trump set to take office later this month, its unclear how his assumption of power will affect certain segments of the business world that currently import products from China. As part of his electioneering and political campaign, Trump had repeatedly promised to place a tariff on certain countries that he believes take advantage of the United States. China is one such country Trump has targeted, claiming they are ripping off our intellectual properties and underselling US-based companies for years on end.

Many of the companies that we do business with are located in mainland China so it doesn’t take a genius to realize that said companies will undoubtedly be adversely affected by tariffs. Many companies could see as much as a 60% charge levied against them unless the Chinese government decides to play ball with the US. Other companies we do business with are located in Bangladesh and Mexico so its unclear if these companies will be affected by tariffs or by how much.

One of our distributors has already indicated that they will be passing along any additional charges they may incur to their clientele until the tariffs have either been scaled back or removed entirely. If this occurs, we will make an announcement indicating that the pre-order price for such-and-such line will be increased, then pass along these costs to our own clientele in line with the revised MAP. We’re sorry to have to make this announcement and/or increase the price for certain lines but hope you understand that we play no role in these potential cost increases which could take effect later this month.