Affect of Steel and Aluminum Tariff on New Caterham Kit Pricing?

[SENC]

Thanks Croc - interesting reading, though in summary it seems a wordy way of saying we really dont know the impact, yet.

 

I'm fairly conflicted about all this.  I'm inherently anti-tariff and pro free trade... but I also recognize that for decades the US has been going this route largely alone (though it, too, has been in the tariff/protectionist game on certain items).  Economically I am all for allowing markets to determine where something can be made most efficiently - but recognize there are very real risks to the level of off-shoring that has occurred (and that foreign government subsidization, either directly or through cost controls have made an un-level playing field).

 

In the end, in my opinion, using tariffs as a tool to bring back business will prove to be another failed tactic given the exceptionally high cost of doing business (producing products) in this country due to regulation and corporate taxation (including supply tariffs).  Fix those and we still have a manpower problem that won't be resolved without immigration reform (that neither political party seems willing to address from an economic impact perspective).  

 

Ultimately, the national and global slowdown in population growth (and expected decline) are going to require radically different economic models that rely more on efficiency, productivity, and cost reduction than on growth.  How we do that in an era demanding more investment to radically change power generation amd insisting on safety/risk reduction, I'm not sure. 

Edited May 3, 2025 by SENC

[Croc]

9 hours ago, SENC said:

Thanks Croc - interesting reading, though in summary it seems a wordy way of saying we really dont know the impact, yet.

 

I'm fairly conflicted about all this.  I'm inherently anti-tariff and pro free trade... but I also recognize that for decades the US has been going this route largely alone (though it, too, has been in the tariff/protectionist game on certain items).  Economically I am all for allowing markets to determine where something can be made most efficiently - but recognize there are very real risks to the level of off-shoring that has occurred (and that foreign government subsidization, either directly or through cost controls have made an un-level playing field).

 

In the end, in my opinion, using tariffs as a tool to bring back business will prove to be another failed tactic given the exceptionally high cost of doing business (producing products) in this country due to regulation and corporate taxation (including supply tariffs).  Fix those and we still have a manpower problem that won't be resolved without immigration reform (that neither political party seems willing to address from an economic impact perspective).  

 

Ultimately, the national and global slowdown in population growth (and expected decline) are going to require radically different economic models that rely more on efficiency, productivity, and cost reduction than on growth.  How we do that in an era demanding more investment to radically change power generation amd insisting on safety/risk reduction, I'm not sure. 

 

 

 

Yep - no one has a clue on how to implement tariffs, including the US government.  All I know is that things will cost a LOT more money for me to buy and shipping (if it is still possible) will be prohibitively expensive as the red tape will be supercharged. 

 

Your reaction is very close to where my head is at.  Every time I have seen an economy somewhere around the world try and pivot its foundational base structures it NEVER happens within the time frame promised by a politician.  It can happen but it takes sustained 10-20 years of effort.  In the meantime you can lay waste to the economy and its people.  Plus tariffs are an imperfect mechanism to do this - fiscal policy, then monetary policy, or preferably those two combined, are always the better approaches as they are stronger tools.  Trade policy is a long way back in third place.  Logistic channels have such long lead times in production cycles - they are years long.  R&D investment is such a big part of the equation - something this administration does not get with its anti STEM mentality.  Plus you pick up on the lack of employable labor - the US economy is structurally at full employment (well it was until we hit a recession this year - wait for the stats to release in 3Q), so immigration is part of the puzzle to solve but cannot with this lot of politicians.   This is what has me thinking we are on a journey into weakness before any turnaround can occur.  Trying this on a such a politically polarized country is a big unknown. 

 

 

 

 

[SENC]

I am afraid you are right, and that we're in for a bumpy road (at best).

[Mark IV]

Here is the list of affected auto parts from my broker:

 

Attachment 2_Auto Parts HTS List 1.pdf

[Mark IV]

So, will we bring back all of the coffee and banana plantations that have been offshored? How about the cacao trees? Will North Dakota once again be the chocolate capital of the world? And of course, we will open factories to produce products for Dollar Tree and Wal Mart. There are billionaires just chomping at the bit to invest in factories that earn 2 cents on each product.

Edited May 9, 2025 by Mark IV

[MV8]

Wait.

 

[Rustler]

Quick reminder the topic here is how recently imposed tariffs will effect Caterham kits and parts. 

 

There was a big announcement yesterday that was light on details but shows promise for Caterham owners, current and prospective.  Two of the product groups specifically discussed are relevant here, steel/aluminum and automobiles.  I think the tariffs that kit buyers will be subject to are steel/alum and auto parts since the kit comes in as component parts and not a complete auto (true?).  So I'm unclear on where the present deal leaves auto parts imported from the UK.   But right now (and literally subject to day to day change), I'm thinking that the kit is going to be subject to a 10% tariff on the entire value?  Does that sound right? 

 

Here are few excerpts from WSJ on yesterday's announcement:

 

"Under the deal, most U.K. goods will still be subject to the global 10% tariff the U.S. imposed on all countries in April. But U.K. steel and aluminum will be exempt from the U.S.’s 25% levy and U.K. car tariffs will be lowered to 10% from 25% for the first 100,000 vehicles...

 

...U.K. officials say that they are continuing to negotiate with Trump officials to reduce the baseline 10% tariffs the U.S. imposed." 

[Gene_W]

I read the available information the same as Rustler. I think most recent pricing (from US distributors) included the 2.5% existing tariff so kits delivered may have an additional 7.5% which while unfortunate is not as bad as what was originally proposed. This is of direct interest to me also as I have a kit that is targeted to deliver in the US around late summer early fall. Of course the "negotiations" could change or go off track. One thing I have investigated is the possibility of "parking" the kit in a bonded warehouse in England and slowing the delivery. I hope it doesn't come to that since that would be like trying to "time" the stock market.

[slowdude]

My guess is we will see a taper / stability in late June/July.

 

Reciprocal tariffs will bring the original tariffs amount down a bit, but still more than we were paying before.

[CarYenta]

My 620 is at port right now and I paid about 10% extra. Car is not yet in my driveway so we'll see if that's final or not.

[Gene_W]

Thanks, that is good information. Curious whether yours is a completed car or a build kit?

[CarYenta]

33 minutes ago, Gene_W said:

Thanks, that is good information. Curious whether yours is a completed car or a build kit?

It is still a build kit, there's just a bit less to do on 620's compared to other models as the factory doesn't want one to mess up the flagship or CSR's? Unsure why that is 

[Rustler]

OP here with a postscript now that my Seven has been through customs:  

 

My Seven came through customs in late August with multiple other customer's cars in the container. This has been an ever changing situation so I don't know for how long this information will be valid.  I have been working with some excellent and knowledgeable people on this purchase and import, and through no fault of theirs no one could give me a firm answer on what the final tariff was going to be until we received the customs paper work.  Even more amazingly, the government was not only unsure of what rate to apply, but in fact different rates were applied to identical parts for different customers in the same shipment/container.  From the top down they are making it up as they go. 

   

The numbers:  For the chassis I paid a blended rate, broadly consisting of 1/4 of the kit at 25% for UK derivative steel and aluminum; 1/4 at 2.5% as suspension components, and 1/2 at 10 to 12.5% as auto parts. Total for a 360S was $5,700.  For the engine and trans I paid a total of $2,300.  So not-worst-case-but-still-brutal total of $8,000 on a moderately spec'd 360S, which I think is about 14% of the MSRP including some options.  The worst case scenario we factored as "unlikely but feasible" was 25% on the total.  So, dodged that bullet, but still took a punch to the gut.

 

Had I not started this journey long before the tariffs were a thing, this would have been a deal breaker for me.  And after this experience I am most certainly cutting back on discretionary spending.  That said, now that the cash has been forked out and payment is behind me, I'm thrilled to have a Seven on the way and overall glad that I pushed through.  Onward!

 

Hope this wrap-up helps someone trying to figure out the impact of tariffs on a Seven purchase. 

 

Edited November 3, 2025 by Rustler

[CarYenta]

20 minutes ago, Rustler said:

OP here with a postscript now that my Seven has been through customs:  

 

My Seven came through customs in late August with multiple other customer's cars in the container. This has been an ever changing situation so I don't know for how long this information will be valid.  I have been working with some excellent and knowledgeable people on this purchase and import, and through no fault of theirs no one could give me a firm answer on what the final tariff was going to be until we received the customs paper work.  Even more amazingly, the government was not only unsure of what rate to apply, but in fact different rates were applied to identical parts for different customers in the same shipment/container.  From the top down they are making it up as they go. 

   

The numbers:  For the chassis I paid a blended rate, broadly consisting of 1/4 of the kit at 25% for UK derivative steel and aluminum; 1/4 at 2.5% as suspension components, and 1/2 at 10 to 12.5% as auto parts. Total for a 360S was $5,700.  For the engine and trans I paid a total of $2,300.  So not-worst-case-but-still-brutal total of $8,000 on a moderately spec'd 360S, which I think is about 14% of the MSRP including some options.  The worst case scenario we factored as "unlikely but feasible" was 25% on the total.  So, dodged that bullet, but still took a punch to the gut.

 

Had I not started this journey long before the tariffs were a thing, this would have been a deal breaker for me.  And after this experience I am most certainly cutting back on discretionary spending.  That said, now that the cash has been forked out and payment is behind me, I'm thrilled to have a Seven on the way and overall glad that I pushed through.  Onward!

 

Hope this wrap-up helps someone trying to figure out the impact of tariffs on a Seven purchase. 

 

14% is a real bummer. I try to think how cheap cars are still compared to a lot of other countries like Australia, Switzerland, Denmark, or the real crazy Singapore for things like this. And who knows, maybe Caterham won't be around much longer and this will be priceless to have a new one you created.

[Rustler]

Quick correction, I didn't add options when calculating the percentage of total MSRP.  It's closer to 13%. 

 

@CarYenta Very fair point. It's absolutely true that in the USA we have paid and (even after tariffs) continue to pay fractions of what consumers in other countries pay for discretionary goods of all stripes, including, or perhaps particularly so, cars.  We also get stuff quickly, and we get exactly what we want.  It has been a golden age of consumerism.  Americans are very unfamiliar with having to pay more, wait longer, or compromise more than they want.  I don't necessarily think it would be unhealthy in the long run to rebalance that a bit, but it's gunna be painful getting there.

 

In hindsight, while definitely a real bummer, tariffs or whatever else couldn't possibly dent my excitement for this Caterham!  

[Croc]

1 hour ago, Rustler said:

OP here with a postscript now that my Seven has been through customs:  

 

 

 

 

 

Well summarized - thank you for posting.

[Gene_W]

I ended up in approximately the same place. Around $7-8K additional. Apparently when the engines came in for the cars in the same shipment, one customs inspector assessed 25% on one engine while another at the same time assessed 15% on the other engine (both 360 engines I think). Ah, government efficiency at work.