Jun Xu

U.S. fastener importers are raising prices in response to a tariff hike on fasteners from China.

U.S. President Donald Trump hiked 10% tariffs on $200 billion of fasteners and other select goods manufactured in China to 25% on May 10.

Brighton-Best International president Jun Xu told GlobalFastenerNews.com that his company has taken a “hybrid” approach to address tariffs.

“We’ve had to increase our prices to compensate for the added cost of tariffs, and we’ve been looking to diversify our countries of origin,” Xu told GlobalFastenerNews.com.

Ohio-based Stelfast president Don Haggerty told GlobalFastenerNews.com that his company is also raising prices.

“As we start to incur the additional cost on incoming product we will be adjusting our selling price,” Haggerty stated. “These price increases will be rolled out over the next couple of months.”

Xu said Brighton-Best was surprised by the May 10 tariff hike.

“All indications have been that the negotiations were going well,” Xu stated. “At this point however, we believe the tariffs are a long-term issue as both China and the USA have entrenched themselves further into their corners.”

In addition to price increases, both importers said they’re looking at sourcing fasteners from countries other than China to offset the tariffs.

Stelfast has reviewed pricing from China, Taiwan, Korea, Vietnam, Thailand, Germany, Italy, Croatia, India and Mexico, Haggerty said.

In addition, both importers are looking to source fasteners from other countries.

“We have begun moving production of several products to countries other than China to minimize the impact,” Haggerty told GlobalFastenerNews.com.

Haggerty noted that resourcing fasteners comes with an increased cost on virtually all products.

Fastener tariff hikes aren’t the only issue importers are trying to solve, according to Haggerty.

“Our next challenge is the nut product,” Haggerty told GlobalFastenerNews.com. “This has not been included in any of the tariffs in the past year. 

“However, there is now a proposed list 4 that was released. The tariff code for nuts is included on this listing.”

So how long before fasteners taxed at the 25% rate arrive in the U.S.? 

“For the affected products, basically anything that enters after June 1st will be affected,” Xu stated. “Considering it takes 90-120 days to produce and 1 month of shipping time, basically our on order PO’s from Feb 2019 onwards are affected.”

Xu said he does not expect a quick resolution to the U.S. tariffs.

“The USA wants structural change in China’s economy and introduce new laws / enforcements around intellectual property protection among other issues,” Xu told GlobalFastenerNews.com. “China has made it clear it will not enforce any structural changes to its laws to placate the USA. 

“China is probably playing to wait out the Trump administration. So we do not believe this will go away anytime soon.”

Fasteners are listed among the 6,031 tariff codes that would be taxed if the 25% duties are implemented by the U.S. The tariff appears to apply to nearly all fasteners imported from China.

The Office of the U.S. Trade Representative (USTR) list includes:

7318.11.00 – Iron or steel, coach screws
7318.12.00 – Iron or steel, wood screws (o/than coach screws)
7318.13.00 – Iron or steel, screw hooks and screw rings
7318.14.10 – Iron or steel, self-tapping screws, w/shanks or threads less than 6 mm in diameter
7318.14.50 – Iron or steel, self-tapping screws, w/shanks or threads 6 mm or more in diameter
7318.15.20 – Iron or steel, bolts and bolts & their nuts or washers, imported in the same shipment
7318.15.40 – Iron or steel, machine screws (o/than cap screws), 9.5 mm or more in length and 3.2 mm in diameter
7318.15.50 – Iron or steel, threaded studs
7318.15.60 – Iron or steel, screws and bolts, nesoi, having shanks or threads less than 6 mm in diameter
7318.15.80 – Iron or steel, screws and bolts, nesoi, having shanks or threads 6 mm or more in diameter
7318.19.00 – Iron or steel, threaded articles similar to screws, bolts, nuts, coach screws & screw hooks, nesoi
7318.21.00 – Iron or steel, spring washers and other lock washers
7318.22.00 – Iron or steel, washers (o/than spring washers and other lock washers)
7318.23.00 – Iron or steel, rivets
7318.24.00 – Iron or steel, cotters and cotter pins
7318.29.00 – Iron or steel, nonthreaded articles similar to rivets, cotters, cotter pins, washers and spring washers