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Tariff's and the Trucking Industry

Posted by Tim Corcoran/ Triple R Truck Parts on Jan 15th 2019

While President Trump's Tariffs against China have become a hot bed issue in industry, most consumers know little about them.  Mass Media largely ignores the issue in favor of more "sensationalism" stories about the administration.  While a good majority of industry agrees that we were being treated unfairly in the China-US trade deal, I don't think most realized just how much of an impact it would have on business.  I'm not sure if they thought China would just "roll over" or if they underestimated the depth American businesses were involved in Chinese trade of some kind, either directly or indirectly.  We're not here to talk politics but we do want to point out how it has affected not only the trucking industry but the parts industry specifically.

If you take a chance to look at the exhaustive pages upon pages of specific tariff'd items you'll see they go far beyond just completed physical products imported from China.  They include everything from the equipment American businesses use to actually make the product to the nuts, bolts and silicone wafers used in products assembled on American soil.  So even your most hardcore "Made in the USA" products are most likely affected in some way.  This is where the main problem with the tariffs come into play.  While they've no doubt put a squeeze on China's businesses, they've essentially just passed the cost right back onto the American businesses that are involved. In turn,  American businesses either have to absorb the cost or raise prices (or both).

In the business industry, parts and service being no exception, it's not uncommon to have price increases yearly, bi-annually or even quarterly.  The cost of raw materials rise.  The cost of labor rises.  The cost of shipping rises.  It's part of running a business.  However, historically price increases were generally minor and companies hesitated to issue them so they don't alienate their suppliers and in turn consumers.  Bottom line, raising prices could cost sales.  In fact, if possible, they would try to find a way to cut costs, particularly on fast movers, to help increase sales.  However, over the past year since the first phase of the tariffs began more price increases came then ever before.  In fact they started to come fast and furious with some companies issuing them as often as every two months!  In my twenty plus years in the business I have never seen as many "first of the year" price changes as we did this year. The new year is a common time for businesses to make price changes. However, I can never recall almost 75% of the lines we carry increase at the same time!

While a good deal of these increases are legitimate, there's no doubt that many businesses are using the opportunity to mask long needed increases or to simply increase the bottom line.  And it will continue to trickle down.  Resale will increase.  Repairs will increase.  Shipping will increase.  In the end this increase from manufacturer to supplier will continue to go down all the way to the end consumer. Triple R has done what we can to keep the cost to our customers minimal. In many cases absorbing as much as half of the increase or more to keep prices reasonable. However, inevitably we have to pass some costs along if we want to stay in business ourselves.  Over the next month or so unfortunately you will see many prices increase on these site and our other ecommerce platforms as we exhaust inventory purchased at the old price point and have to reorder it.  We will try to keep the increases minimal.  However, this may mean some of our prices may appear to be higher than the next guy because they haven't raised their prices yet.  They will have no choice but to raise their prices eventually as they have to reorder product as well. So remember the next time your purchase a product that you "know" was cheaper last year, it probably was.  It's all just a part of trickle down economics.


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