Tariffs and EDC
WARNING: I have attempted to keep this post as apolitical as possible, but given the facts, I think some more sensitive people might be upset by conclusions I have drawn here from the facts, law, history, economics, and logic. If you might be one of those people, I posted two posts this week to cater to you. Here is the other post. Feel free to skip this one.
WARNING II: I guess this is why I have never covered current events here. As I was finishing up the article, all of the tariffs on countries but China were suspended for 90 days. I am still posting this because the tariff that matters to us the most, the steel one, seems to still be in place. While some may view this as a negotiation tactic, I think it is more likely a reaction to the strong negative financial news that will be spun as a negotiation tactic. It just might be that no one in charge knows what they are doing. Maybe. Possibly. SECOND UPDATE: While China has been hit with more tariffs even as the original 57 are suspended, tariffs that target smartphones, laptops, and computer chips were just announced as being exempt from tariffs. At this point, I am fairly certain that the tariff announcements are not part of a thought out plan.
As a lawyer and someone that writes about gear I have been asked this question about two dozen times since the start of the year:
Will tariffs be good for EDC market?
Simple answer: No. They will be terrible.
Longer answer: Buckle up, this is a mess of law, economics, steel, and logic.
What are Tariffs?
Tariffs are a tax on imported goods. The tax is paid by the importer, not the country of origin or the exporter. So, for example, if there is a tariff on steel, which there is now, when Spyderco imports M390 (which is made in Bohler’s factory in Kapfenberg, Austria), Spyderco, not Austria or Bohler, pays the tariff. Critically—foreign countries do not pay the tariff, companies here in the US do. They, in turn, pass the cost increases along to consumers. Just like with any increase in costs along the supply chain, it is always the last link in that chain, us the consumers, that get saddled with the additional cost. So, and this is important, a tariff on Chinese imports does not mean that China pays a fee to send stuff to the US. US companies are the source of the tariff revenues. Raising tariffs is literally raising taxes on US companies. It is both dishonest and a sign of consciousness of guilt to say that you support lowering taxes but increasing tariffs. Tariffs are taxes paid by people and companies in the US.
Now, of course, other countries care about tariffs on their goods. If their goods are more expensive, then they are less likely to be imported, and that is BAD for that country. So, even though they do not pay the tariffs, countries will (and have) raise tariffs on our goods going to their countries in retaliation. China, for example, has imposed tariffs on US goods in response to us imposing tariffs on their goods.
Under the US Constitution, Congress, not the President, has the power to control tariffs which are also called duties. Article 1, Section 8 states:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.
The “duties” section is the part related to tariffs.
So if the Constitution invests the power to impose duties (or tariffs) in Congress how does that power get to the President? As has happened consistently throughout the 20th and 21st century, Congress delegated powers to the Executive, namely the President, to impose tariffs. They do this through specific statutes. When Congress wants to regulate a specific import market, they pass a law and that law can include the power to raise or lower tariffs. For example, the Trade Expansion Act (section 232) gave the President the right to raise and lower tariffs on steel, aluminum, and auto imports. The Trade Act of 1974 similarly delegates the power to raise and lower tariffs in other areas to the President. Over and over again, Congress is bequeathing is power to impose tariffs on the President and this is occurring regardless of the parties involved.
Of course, Congress can always repeal their laws that delegate authority to raise and lower tariffs, but that is a political decision, one that is unlikely to happen when all of the branches of government, including the US Supreme Court, are controlled by a single party and that party is, for all intents and purposes, controlled by a single person. It is also unlikely to happen 18 months or more before even a midterm election. In short, for now, absent a creative legal challenge, the current tariffs are likely to stay in place so long as the President wants them to.
This does, of course, underscore a problem with our democracy. For more on this process see the US Supreme Court opinion West Virginia v. EPA. When our elected officials give their power to someone else, we the people have less say over what happens. This happens when Congress gives power to the Executive and they, in turn, give to an administrative agency. It also happens when, in this case, Congress gives it power directly to the President. Perhaps Congress should do the job the Constitution gave to them.
Here is another issue with tariffs. While we did have higher tariff rates in the mid 19th century than most of the 20th and 21st century, this was done to protect the burgeoning US economy. By raising the price of foreign goods, the US could develop and protect its own industries. But that was at a time when US made stuff was comparatively poor in quality. In that environment tariffs protected US industries as they pushed to rival overseas companies. But when you impose tariffs and you are at the top of the economic food chain and people around the globe want your stuff, the protectionism that tariffs represent backfires.
Think of it this way—protectionist tariffs also work in reverse. If they protected the US from superior products in Europe during the 19th century, they should do the same now for burgeoning markets in the world. The US is still the world leader in high end industrial products. While China makes good laptops and even cars, the US reigns supreme when it comes to things like weapons systems, jet engines, and complex scientific equipment. These products take extreme expertise to make, they are generally viewed as essential for modern life, and they have huge margins. Some countries can rival us in one or two heavy industries, but the US ranks at or near the top in nearly everything that is very complex and very costly (read: highly profitable). If you want an MRI machine, a very complex device with huge margins, you can get one made in one of six countries: the US, the Netherlands, Germany, China, India, and Japan. Only the US and Japan have two companies that make MRIs from soup to nuts, but virtually all of the foreign companies also have large workforces here in the US. Put another way, the US is the hub of production for MRIs for the entire world. By imposing tariffs and triggering tariffs from other countries, we are, in essence helping protect other foreign companies. India’s upstart MRI company, Voxelgrids Innovation, doesn’t have to compete on a level playing field with a fairly priced US MRI machine. A tariff war, then, favors developing economies, not developed ones. This is true of virtually ever kind of complex, expensive goods, just like the ones that the US leads the world in making. Tariffs won’t work for us as a country right now because of this problem, among many others.
The Tariffs Imposed in 2025
So far 2025 has seen a wave of tariffs unlike any seen in the past 100 years. The US’s “trade-weighted” tariff rate rose to 24% and that was before the 57 country announcement. In 2024 it was 2%. The broadest tariffs was a 10% tariff on almost all foreign goods. In addition to that broad tariffs, there are country-specific tariffs. The US and China have been engaging in a trade war since the start of the year and there have been tariffs levied by both countries. As of April 9, the US will be levying a 54% tariff on almost all Chinese goods. On April 2, the US increased tariffs on 57 different trading partners for a wide assortment of goods (these are the tariffs that have been suspended for 90 days). Some tariffs are good-specific. Steel (ahhhh) and aluminum are subject to tariff increases as are automobiles and automobile parts.
Major trade partners were targeted. China, obviously, had tariffs increased, as did the European Union, Canada, Mexico, Great Britain, and Indian. Only Great Britain has yet to apply tariffs in return. In addition to major trade partners, tariffs were imposed on countries that have no appreciable trade with the US. Nearly every country with real trade relations to the US imposed retaliatory tariffs and all of these were supported by large majorities of those countries’ populations.
Lesotho, for example, is now subject to a 50% tariff even though there is no significant trade between the US and the African nation. In fact, tariffs were imposed on certain islands that do not even have human inhabitants. Heard and McDonald Islands, two Australian territories, were initially subject to new tariffs despite have zero human residents and no business or manufacturing of any kind. Similarly Norfolk Island was subject to new tariffs even though it has no real industry or businesses and only 2,000 people on the island. All of this makes it unlikely that these tariffs were thoroughly researched or carefully considered. Even if these entries were errors, the fact that the errors occurred and made it into official documents presented to the media indicates a lack of planning. UPDATE: As I was writing this article, the administration doubled down and claimed that the tariffs on uninhabited islands was NOT a mistake. Clearly, we need to punish those birds and penguins for their trade-related mischief.
One country is conspicuously absent from tariffs—Russia. Importantly, Russia is an autocratic country run by an individual who is secretly one of the wealthiest humans to ever live. It is a country without rule of law or free and fair elections. And, it is a country currently at war with a legitimate democratic nation that had been historically conquered by Russia’s antecedent state. Russia also started that war by invading and annexing that country’s territory. They are also a stated enemy of the United States. Yet they, and not our very closest allies, Canada, New Zealand, Australia, or Great Britain (the so-called “Five Eyes” alliance that does not spy on each other nor withhold secrets from one another) evaded tariffs. The claim is that the current sanctions on Russia made tariffs unnecessary, but this is wrong on two accounts. First, even with sanctions imposed because of the Ukraine war, Russia still sent roughly $3.5 billion in goods to the US in 2024. That is considerably more than Lesotho and infinitely more than Heard, McDonald, and Norfolk Island combined. Second, even if there was limited trade, the symbolism of not imposing tariffs on Russia is clear.
There is another possibility—the tariffs are merely a negotiation tactic. This is the line attack proponents present. They indicate that the tariffs, coupled with highly effective negotiation, could result in a better deal for the US throughout the economy. Negotiations are difficult things. They require measured and thoughtful responses. They require savvy players with experience and insights about our adversaries in negotiations. They also require both a stick, which is what tariffs are, but also a carrot, such as diplomatic aid. Unfortuantely, these components of our government have been gutted. There is also not a clear history of effective dealmaking. In fact, empirical analysis shows a history of poor dealmaking. Contemporary history confirms this. Israel and Hamas actually reignited their conflict after our negotiations failed. Russia and Ukraine are nowhere near a deal to end the conflict, despite promises of an immediate resolution. These failures come after a unilateral withdraw from an Iranian nuclear treaty that resulted in more confrontations with Iran, a failed attempt to “fix North Korea” after claiming China could not do so, and inflaming Middle East tensions by unilaterally recognizing Jerusalem as the capital of Israel. So while it is possible the tariffs are negotiation tactic, prior negotiations and behavior indicate a less than sterling track record. Maybe I am wrong. Maybe steel prices plummet and knives are basically free. But I think the opposite is at least slightly more likely give the factual record from the past.
Small Scale Impacts on the Gear Market
One idea is that the tariffs will push people to US producers and this is almost certainly true, to some very small extent. Tariffs only have that effect if the domestic market can handle the offload of demand. The problem is that in the gear world there aren’t a lot of places for excess demand to go. In the flashlight world, for example, only Maglight and Streamlight has any share of the market on lights under $30 that are made in the US. No US company rivals, for example, oLight or Fenix. The knife business is a little better, but not by much. There just aren’t a lot of USA made knives at the $30 price range. Buck has some, but Benchmade, Kershaw, Microtech, CRKT, SOG, Cold Steel, and Spyderco have none.
As a result, even if the tariffs protect US makers, they also means that domestic producers will likely also raise prices. The logic of capitalism is both unyielding and ruthless. Here is an example: say I can buy a Reate for $300 and its domestic competitor, let’s say Protech, sells a Made in the USA knife for $350. Then tariffs go into effect and they are sufficiently calibrated to raise the price of the Reate to $400. That means that the USA made knife is now cheaper. But it is highly unlikely for the US made knife to just sit there at $350. Instead, capitalism dictates that they too should raise their prices, maybe to $375. They still beat the Reate, but they also now make $25 more than they used to. Who would turn down a free $25? Answer—no one, at least in the long term. And so while imported products will go up in price, domestic stuff will to. Then there is the secondary effect that price hikes related to tariffs on inflation. If everything costs more to make, it will cost more to buy, and then we get into another cycle of inflation. And, unfortunately, you can’t put tariffs on price inflation.
But this is not the entire impact. It is unlikely that the knife made in the USA is entirely domestically produced. With Crucible going out of business, there are very few suppliers for cutlery steel in the US, basically just Carpenter and whoever picked up the remnants of Crucible. Here is an article from KSN on the location of cutlery steel makers. Lots of steel is made outside the US and therefore will be hit hard by tariffs. So even domestic producers will still have costs increase and those cost increases will be passed along to us.
Fully made in the USA is a very hard standard to meet and very few companies can do it. Most knife companies import some components, usually steel. Its worse in the flashlight world. Vanishingly few LEDs are made in the US and of those even fewer are made in the US and used in the flashlight industry. So even the true blue Made in the USA companies will likely see an increase in costs as their raw materials are going to increase in price, either because they are from overseas or because tariffs give US makers space to raise prices without a loss of marketshare. Other gear is even worse. There is, for example, no production company making nibs in the US (it is not clear if Pitchman Pens, which prides itself on being Made in the USA, makes nibs in-house)
Large Scale Impacts on the Gear Market
Aside from those two small scale impacts, the tariffs are having huge impacts on a macro scale. Markets are psychology and when the psychology is bad markets are bad. The tariffs are a swift and massive change in the US economy. Change causes uncertainty and uncertainty makes people more conservative with money. As a result consumer spending has dropped precipitously in the first two months of the year. Year over year spending from 2024 is down .4%, but that conceals a lack of direction. While January’s YoY rate was up 1.9%, February’s was down 2.3%. And this all happened BEFORE the tariff war began. Once its price increases are passed along to consumers, it is highly likely that the economy will get worse. And the worse the economy is the lower spending will go. And so even if you were a 100% USA made company your customers will have less money to spend, because everything else is more expensive, and more uncertainty. Sales will fall and even the entirely USA made companies will suffer. There is almost unanimous agreement among economists on this point—tariffs kill the economy.
But that’s not all. State and local governments across the country are struggling. When the evaporation of COVID-related government spending is coupled with a high rate of inflation, these governments cannot fund even level services budgets. $10 of services in 2018 costs about $12.71 now, an increase of 27.1%, a rate that no state or municipal government could sustain in tax increases. This is another economic pressure, aside from tariffs, that is adding to the uncertainty that will negatively impact even pure USA Made firms in the gear world.
Finally, there are the huge federal layoffs. After World War II started, the US government poured tons of money into the economy to lift the country out of the Depression and gear up to fight Nazis and other flavors autocracy. And it worked. The US economy boomed after the war. It worked again to pull us out of COVID’s step economic decline without a recession or depression. But now we have lost the ability to do that as the President has greatly shrunk the size of the federal workforce.
Conclusion
All of this is a long answer to a simple question. Tariffs will impact both consumer prices for gear and the health of gear companies, whether they are entirely US-based or a mix. Knives and lights will cost more. You will have less money to spend and more uncertainty about where it will come from. And there are fewer safeguards and stabilization mechanisms now than before. The economy is very likely to get worse before it gets better and tariffs do not help that.
But there is a special problem for knives. With the collapse of Crucible and the heavy tariffs on steel all knives are going to get more expensive. The tariffs could not have come at worse time. Carpenter remains as the only major producer of cutlery steel in the US and other than a burst of new steels 10 or 15 years ago, they have gone mostly silent developing new steels. Bohler (maker of M390 and others) Uddeholm (maker of Elmax and others) Hitachi (maker of ZDP-189 and others), and Sandvik (maker 14C28N and others) are all overseas companies and will have to contend with tariffs. Erasteel, the company that purchased Crucible’s remaining property, is an overseas company. Latrobe was another big US maker, but they were acquired by Carpenter in 2012. I don’t want to sound alarmist (probably too late for that), but knives are going to be significantly more expensive once the tariffs take hold. How much? I don’t know, but it will likely be noticeable.
Amazon Links (ugh…)