JoeB131
Diamond Member
Sorry but it isn't.
You have 2 widgets. One from the US and one from China. The US widget costs $1.50 in 2017 and the Chinese widget costs $1.40. The blob raises tariffs. The costs to import the Chinese widget goes from $1.40 to $2.00. Then, wow, suddenly, the costs of the US Widget goes from $1.50 to $1.98...overnight! Why did the price go up? Profiteering.
But it's more than that.
Let's take your two widgets. The Chinese Widget goes up to 2.00. Well, before you can change to the American Widget at 1.98, you have to run quality assurance and customer acceptance. And regardless of what the widget costs YOU right now, your customer still expects to buy it at the 2.40 you are selling it to him for. So you either suck up the cost increase, or you renegotiate pricing. But swapping out a part isn't as easy as you think it is. Resourcing can sometimes take years, depending on the complexity of the part.