While we are not going to go political here, you all should realize that the 145% tariff on China has probably brought the supply of Cougar reproduction parts to an end. We depend on relatively small contract manufacturing plants that are not likely to survive unless the tariffs are removed pretty quickly. Our tooling sits in these plants and if they go there is no way to know what will become of the tooling.
These parts will never be manufactured in the USA. The quantities are too small and the processes like chrome plating are no longer allowed, and there is no money to pay for building the factory to begin with. It was good while it lasted.
Probably we need to wait a bit. The tariffs are likely temporary until China drops their resistance to USA manufactured goods. It pays to wait some times.
The problem is that China has a completely different culture of manufacturing. They have relatively small factories that manufacture products for many different customers. They typically don’t have their own products or brand. The ones that have English speaking staff specialize in products that are exported to the USA. These factories are hyper productive because they are able to buy materials in bulk and to run close to 24 hours a day. They are also constantly investing in better equipment. It used to be that low cost labor was the key but today in the large industrial cities labor is not much different than the rest of the world.
So what does all that mean? Factories are expensive to build and equip. They are typically carrying significant debt. They can’t sustain a long period of no sales. For them the clock started ticking back in March. Chinese banks have no sense of humor. Many factories have started trying to sell off assets. The problem is that if my factory partners go bankrupt I will lose my tools.
I’m sending money to try to help. But we keep hearing that our government is estimating two years to get an agreement. We have about three weeks.
Well China has a trade deficit in the hundreds of billions of dollars that has to be dealt with. It is not going to be easy for them. I am afraid that any hope of it ending in a matter of a few weeks is wishful thinking.
Likely all types of connectors (plastic, molded, etc.) plus wiring will go up in price. I suspect things I use all the time, like heat shrink and uninsulated butt connectors will rise in price as well.
I have always tried to seek out and purchase usa made items but as we know its not always possible and on top of that how much of that item is actually made here? In the case of cougar parts I was bummed to find out how many repro parts where made overseas especially with how poor my experience was with overseas mustang repro parts. I quickly realized cougar parts had not been so cheaply reproduced like the mustang stuff had been. This is thanks to the dedicated people putting the effort into make sure we have quality parts even if they did cost a little bit more to reproduce.
So Bill in your opinion what would be some parts to buy before they become really hard to get? or dry up on production? I am far enough with my car I have most all of the reproduced parts already but others may not. Now would be a good time to get what you need before you cant.
Cougar sheet metal from any vendor. Small cougar specific interior parts. Mustang interchangeable parts will be around.
Unfortunately, the time of cheap parts or anything, even from china, is over. The tariff is about 60% off the boat currently, some things can be lowered if classified not auto parts, but if it is auto…ouch. I still can’t afford to have parts made in America, and the quality is so-so, at least the china made parts they ask me what quality I want.
Basically the trade tariff helps large companies and our government. Small businesses are feeling the pain.
Very depressing to hear. On the one hand, I concur we need to level the playing field (we’ve been elevating the standard of living of the not-so-free world waaaayyyy too long IMHO), but what a shame that niche markets will likely suffer significantly.
Fortunately, my wire and molded connectors are still made in the USA. Prices for wire and connectors sold by Autozone and the other big auto stores is going up. I’d love to see them switch to higher qualify US-made wire. However, copper wire continues to go up due to high demand.
I agree, these tariffs are going to hurt many small businesses like mine, that manufacture products. For example, most electronic components have not been made in the US for 40+ years. Why? Because the component sale price is too low to justify millions of capital dollars to build an automated assembly line for commodity parts like resistors, capacitors, and transistors. Intel can justify a $10B fab because they are selling CPU chips for hundreds or thousands of dollars each.
Trying to coerce manufacturers to rebuild US factories to make low-value or low-volume items makes little economic sense, so the end result is that we will all pay more.
It makes more sense to identify strategic industries and strengthen them using economic incentives, and as a last resort, selective tariffs.
There will be short term pain for long term gains. This country has been ripped off for far too long as we have artificial barriers to trade into many countries…we are the big kahuna market and it’s time we acted like it. This is the art of the deal. These tariffs were meant to open the eyes of the American public and foreign leaders. It has done that… deals will be done and tariffs into the USA will fall again because our country will get a fair shot for a change
Reminds me of a song: “Hey Virginia, they didn’t give you quite enough information.” It is amazing that most people don’t think tariffs will effect them.
Here is how tariffs work. Our government places a tax on everything that is imported into our country. Right now for China goods it is 145% So an item that costs $100 the tax is $145. (total $245) The tax is paid before the product can leave the port. The $145 in tax will be passed on to the consumer in the form of a higher price. In many cases the company importing the product doesn’t have the cash to cover the additional tax so they cancel the order.
The net effect is that the shelves will be empty or the price will be more that double what it used to be. We are now about three weeks from seeing this starting to happen.
It takes years to build a factory. Nearly all of the machines you need for your factory come from China. Factories are expensive and very few companies have the capital needed to build a factory and none of the skills it takes to operate one. China has over twice our population employed in manufacturing. We lack the people to work in these factories. Remember if we could have built stuff here for a competitive price, nothing would be made any where else.
Regardless of whether tariffs are good or bad, what deals get made, or who benefits by these deals, global supply chains have been blown up. Our economy is driven by the consumer, and the flow of much of what gets consumed has stopped. We haven’t yet seen the full impact of the damage that has been done.
The damage of all this will last for years… maybe decades. I agree that much manufacturing should not be sent overseas (it should be encouraged to be done in the pre 2020 former North America Free Trade Zone). Obviously there needs to be allowances for small manufacturing/limited unit production to help smaller businessness.
Mass tariffs didn’t work during the great depression… I doubt they are going to work now. It just doesn’t make financial sense for anyone.
Bill, you have had some wonderful, high quality, products produced for the FoMoCo hobby over the years, and I want to thank you for all you do, and wish you all the best during this difficult period.
Your good customer, and friend, Scott Fergujson.
Here is the info I received today from my customs broker, “The previous tariff calculation was based on pre-tariffs prior to Trump’s recent whopping increase. As of now, it stands at a total of 172.5% in duties based on the purchase price/value of the Chinese goods in question.”
I don’t believe that the tariffs will affect the aftermarket parts at all, other than costing more. If you need a part and the price goes up, you’ll still buy it because you need it. I think people running around screaming about all the hypotheticals of the taffifs are just creating fear and panic in people. In the long run, our country can not sustain the trillions in negative trade. There will be industries hurt in the short term, I agree with you there, but someone doing a $25k restoration on a classic Cougar isn’t going to stop buying parts for it.