Trump’s 50% steel and aluminum tariffs raise costs for F-35 and Abrams production, impacting U.S. defense. Explore the effects on supply chains and budgets.
On large batches like washers and screws, that’s correct. A good chunk of these contracts are smaller orders where the BOM accounts for the bulk of the machining process. Anecdotally, when prices went up during the pandemic due to supply chain, our manufacturing costs for most of our aluminum orders doubled. You want a dozen radio control knobs? Sorry, machining only takes an hour, but material just tripled in cost, and you have to buy 120’ minimum.
Exactly the raw material cost is insignificant, what costs is the machining, assembly and quality control.
On large batches like washers and screws, that’s correct. A good chunk of these contracts are smaller orders where the BOM accounts for the bulk of the machining process. Anecdotally, when prices went up during the pandemic due to supply chain, our manufacturing costs for most of our aluminum orders doubled. You want a dozen radio control knobs? Sorry, machining only takes an hour, but material just tripled in cost, and you have to buy 120’ minimum.