As the weeks have continued to pass, the tariff situation continues to unfold. We have continued to follow the situation closely to assess the impact on our company, customers, and community in general. Trump had initially planned to impose a 25% tariff on all goods moving between Canada and the US on Feb 4th. However, this was postponed to March 4th. On March 6th, Trump imposed exemptions on tariffs for products that fall under the USMCA trade agreements.
How does that impact current customers?
If you have placed an order already, prior to March 4, 2025 at 3PM, we will continue to uphold our promise to provide DDP or DAP incoterms for American customers (basically this means “delivery duty paid”, which means that the shipment will enter the US with us paying any duties and tariffs). We have continued to provide this as the default option since June 2, 2022. You can learn more about this in our previous article.
The main reason we can provide this is because most of our products, including the AltMill and LongMill are certified under the USMCA. For a full list of USMCA-certified items, please see this list.
Customers in Canada and other parts of the world will not be impacted by the trade war.
As of this moment, tariffs on goods that fall under USMCA will be exempt from US-Canada tariffs until at least April 2, 2025. This means that many machines shipping US-bound will cross without tariffs.
Additionally, we have not seen any changes to the de-minimis. Orders under $800USD may still be imported from Canada to the US without duties and taxes due to the De Minimis Value threshold.
As of this moment, although it is possible the trade disputes will be over, it is not clear what the outcome will be. For the time being, new customers purchasing March 4, 2025 at 3PM may be required to pay tariffs if they are imposed. However, we are currently assessing the impact of potentially offering a subsidy to the tariff if they are imposed to reduce the impact to the customer. If that is the case, we will provide support for all customers to navigate through the tariff situation and provide proper customs documentation and filings for import to US. Latest updates will be provided here.
If a tariff is imposed and you are required to pay for it, duties and taxes will be assessed at the border and you will receive a customs invoice prior to delivery. If you need help navigating, please feel free to contact us.
How this impacts the wider hobby CNC industry
We expect that tariffs that have been in place previously and new ones that are currently being imposed will hurt the accessibility and pricing of nearly all items in the North American hobby CNC industry. The tariffs imposed by the US have had an impact due to Section 301 for Chinese goods years prior to this trade war in 2025 which imposed tariffs ranging from 10-25%. This current trade war imposes additional tariffs on Chinese goods coming into the US of 20% currently.
It is no secret that significant volumes of materials and parts come from China and other areas overseas. US and Canada oftentimes lack the technology or capacity to make components at an affordable cost of high quality. We have oftentimes tried to work with Canadian and US manufacturers, only to find out that a significant portion of their manufacturing is already done overseas. Additionally, for certain products, such as aluminum parts, China provides a rebate for exports, which makes it significantly (around 60% less expensive) to produce certain parts overseas, which makes it an attractive option over producing domestically.
From my last visit to China, and in response to the tariffs, manipulating customs values for Chinese to USA imports is almost universally rampant. Discussions with some other CNC manufacturers in the US also noted that they are using different loopholes to get around higher taxes and tariffs. I expect that many companies will look for new ways to mitigate the impact of tariffs and taxes, which may soften the blow of costs passed down to the consumer. However, these factors still greatly impact most US CNC producers.
New sweeping tariffs on steel and aluminum imports to the US are also expected to impact costs for CNC machines in the US, especially since most CNC machines are made from steel and aluminum. For context, the US imported 3.2 million tons of aluminum from Canada alone last year, compared to around 785,000 tons produced domestically in the US, or approximately one-quarter of the total amount imported from Canada. Even if the trade war doesn’t last that long, job cuts in the industry in preparation for the tariffs is expected to cause ripple effects in the industry regardless, which may increase prices for materials in the short term as well.
New tariffs imposed in 2025 affect Canadian producers as well. While current exemptions for USMCA-qualified products provide a short break from this, a full imposition of tariffs will mean that the cost for US customers to import their CNC machines from Canada will jump. Based on Canadian imposed tariffs, Canadian customers importing CNC machines from the US may also find their costs to increase as well.
The silver lining is that we need to be more creative in bringing manufacturing back to Canada to control costs. Over time we hope that the cost of production and our production ability in North America develop. We also hope that some of the technology we develop can be used for creating this future as well.
What’s next?
We are hoping that the trade war will end before April 2nd when Canada, Mexico, and US will revisit the exemptions on USMCA products. We are continuing to monitor the news and plan on how to navigate these tariffs to minimize the impact to us and our customers. For further updates, please see our blog.