6 ms·

a purported niche/low-volume electronics, but the profit is somehow dependent on BOM price? a tariff bump on a small BOM doesn’t take you from profitable to hom

a purported niche/low-volume electronics, but the profit is somehow dependent on BOM price? a tariff bump on a small BOM doesn’t take you from profitable to homeless. if that happened, the business already had seriously bad margins, bad cash flow, over-leverage, or maybe he was just doing it out of love getting paid maybe back for his time or not. tariffs might’ve hurt, but they don’t collapse a healthy niche hardware company where buyers are presumably also into the niche. seems weird i dont get it. can you explain further?

herdymerzbow 11mo ago
gamers nexus did a great (and very long) video on the impact of tariffs on US computer businesses. Some of the manufacturers went into quite a bit of detail breaking down their costs and how tariffs would render some products so unprofitable that they would cease to serve the US market. Not sure if it necessarily applies to a niche/low volume business, but the impacts on a larger business were eye opening: https://www.youtube.com/watch?v=1W_mSOS1Qts https://www.youtube.com/watch?v=1W_mSOS1Qts tariffs have chopped and changed so much since this video that the specific tariff amounts mentioned are likely not accurate.
esalman 11mo ago
Do you run a business with good margin, good cash flow, optimally leveraged and for profit? If yes, please tell us more about how tariffs have helped you.
- WalterBright 11mo ago
  If you've been making the products locally, the tariffs on foreign products help you.
  - SturgeonsLaw 11mo ago
    Depends on your supply chain's exposure to foreign markets
  - scheme271 11mo ago
    Are your materials and supplies also locally made? The same for each of those suppliers. Very few things are entirely made in the US. How about your equipment? Are the motors, tools, electronics, etc also made in the US? Even companies making stuff in the US are being hit. Very few companies have their entire supply change within the US.
  - esalman 11mo ago
    You cannot truly make anything locally these days. We had decades of free trade. It will take decades to roll back. And you will lose all the benefit that came with it. Even if we pretend the policies are well-intentioned, it takes decades of investment to make the infrastructure and workforce ready to produce things locally at scale. With policies like the dismantling of department of education, I do not see any initiative being taken to prepare the workforce for the future. Let's face it, tariffs are a disaster. The increased prices, hurt American businesses, caused job loss, and increased waste and bloat. The administration created a problem (tariff induced inflation), now they are selling the solution by rolling back tariffs to bring prices down. Anybody older than 8 years know this was the same playbook in previous administration. And they know their base is gullible eough to fall for it. It's just unfortunate that hacker news audience in included in there as well.
    - WalterBright 11mo ago
      > With policies like the dismantling of department of education, I do not see any initiative being taken to prepare the workforce for the future. The DOE was created by Carter, and there is no evidence in the last 45 years of it having any positive effect on education in the US.
      - samtheprogram 11mo ago
        Indeed, it's directly contributed to burgeoning administrative costs in universities through the Federal Student Loan program, and related the devaluing of college degrees. It's probably helped in some aspects too, but the student debt crisis was created by the DOE. And most everyone can agree that college costs have ballooned in the US while the value of the degrees have decreased. It's a perfect example of the worst of both worlds of government guarantees in a capitalist society, like Amtrak and US health care. It eliminates many aspects of competition and blurs incentives while remaining in a economy where decisions are profit-driven.
      - esalman 11mo ago
        Your argument is so baseless that even a template AI response can refute it. Yes, the DoE has been planting decade-scale workforce seeds since the Carter years—mostly via STEM/CTE programs that outlive administrations. Core idea: build adaptable skills (problem-solving, digital literacy, work-based learning) so kids & adults can pivot when AI/climate/whatever nukes today’s jobs. *Carter-era kickoff* - 1979: Science and Engineering Education Act (Carter signs) → first federal push for pre-college STEM pipelines. NSF/DoE joint grants still fund teacher training 45 yrs later. *Reagan/Bush I* - 1983 A Nation at Risk → DoE launches magnet schools & AP incentives. Many still running. *Clinton* - 1994 School-to-Work Opportunities Act → seed money for apprenticeships. morphed into Perkins. *Bush II* - 2006 Perkins IV → “programs of study” with stackable credentials. Still the backbone of high-school CTE. *Obama* - 2010 Race to the Top → $4B for state STEM/CTE alignment. - 2014 Computer Science for All → CS now in 70% of HS nationwide. *Biden* - 2022 YOU Belong in STEM + 2025 DOL/DoE joint admin of WIOA/Perkins → less red tape, more training $. *Impact numbers* - Perkins V: 8M HS students/yr in CTE; 1.3M postsecondary. - WIOA adult ed: 1.5M/yr gain credentials. - Meta-analyses show STEM exposure → +0.2σ critical thinking, +15% lifetime earnings. *Caveats* - Funding is ~$16B/yr total—peanuts vs GDP. - 2025 DoE staff cuts (≈50%) threaten oversight. - Europe still laps us on apprenticeships (3-yr paid tracks vs US 6-month internships). Bottom line: DoE’s been playing the long game since disco. The programs work, but they’re chronically underpowered and politically fragile.
iancmceachern 11mo ago
Hardware companies often operate on a relatively thin margin, especially as compared to say, software companies. Let's say a companies margin was 40%. The cost of their constituent parts doubles due to tariffs, they are no longer making money as a result. I hope this helps explain it for you.
- WalterBright 11mo ago
  It's more complicated than that. For example, the company can raise its prices. How well that works depends on whether there is competition for the company's product. If the competition is also hit by the tariffs, then they're on an even playing field. If the competition is using native parts, then the competitor gets the business.
  - iancmceachern 11mo ago
    This is one of the great misconceptions. There are often no "native" alternatives. Even the machines that make the chips are nearly all made in one country and then shipped around the world. The amazing, modern nature of our modern world is built on the collective effort and knowledge of humankind globally. Globally.
    - WalterBright 11mo ago
      There's concern that if all our chips come from one country, they could cut the supply off and make demands. That's called an "embargo". It's also done to protect local industries, hence the term "protectionism". For example, Canada's large tariffs on American milk are there to protect the local Canadian milk producers. AFAIK, Trump's tariffs are meant to serve the following purposes: 1. so critical supplies, like chips, will be produced domestically 2. to raise money for the treasury 3. to convince countries that have high tariffs to lower them in exchange for the US to reciprocate in lowering ours 4. to incentivize foreign manufacturers to invest in factories in the US 5. to use them as a negotiating tool for other terms favorable to US interests These are not crazy things. We'll see how things play out.

herdymerzbow 11mo ago

gamers nexus did a great (and very long) video on the impact of tariffs on US computer businesses. Some of the manufacturers went into quite a bit of detail breaking down their costs and how tariffs would render some products so unprofitable that they would cease to serve the US market. Not sure if it necessarily applies to a niche/low volume business, but the impacts on a larger business were eye opening: https://www.youtube.com/watch?v=1W_mSOS1Qts https://www.youtube.com/watch?v=1W_mSOS1Qts tariffs have chopped and changed so much since this video that the specific tariff amounts mentioned are likely not accurate.

esalman 11mo ago

Do you run a business with good margin, good cash flow, optimally leveraged and for profit? If yes, please tell us more about how tariffs have helped you.

WalterBright 11mo ago
If you've been making the products locally, the tariffs on foreign products help you.
- SturgeonsLaw 11mo ago
  Depends on your supply chain's exposure to foreign markets
- scheme271 11mo ago
  Are your materials and supplies also locally made? The same for each of those suppliers. Very few things are entirely made in the US. How about your equipment? Are the motors, tools, electronics, etc also made in the US? Even companies making stuff in the US are being hit. Very few companies have their entire supply change within the US.
- esalman 11mo ago
  You cannot truly make anything locally these days. We had decades of free trade. It will take decades to roll back. And you will lose all the benefit that came with it. Even if we pretend the policies are well-intentioned, it takes decades of investment to make the infrastructure and workforce ready to produce things locally at scale. With policies like the dismantling of department of education, I do not see any initiative being taken to prepare the workforce for the future. Let's face it, tariffs are a disaster. The increased prices, hurt American businesses, caused job loss, and increased waste and bloat. The administration created a problem (tariff induced inflation), now they are selling the solution by rolling back tariffs to bring prices down. Anybody older than 8 years know this was the same playbook in previous administration. And they know their base is gullible eough to fall for it. It's just unfortunate that hacker news audience in included in there as well.
  - WalterBright 11mo ago
    > With policies like the dismantling of department of education, I do not see any initiative being taken to prepare the workforce for the future. The DOE was created by Carter, and there is no evidence in the last 45 years of it having any positive effect on education in the US.
    - samtheprogram 11mo ago
      Indeed, it's directly contributed to burgeoning administrative costs in universities through the Federal Student Loan program, and related the devaluing of college degrees. It's probably helped in some aspects too, but the student debt crisis was created by the DOE. And most everyone can agree that college costs have ballooned in the US while the value of the degrees have decreased. It's a perfect example of the worst of both worlds of government guarantees in a capitalist society, like Amtrak and US health care. It eliminates many aspects of competition and blurs incentives while remaining in a economy where decisions are profit-driven.
    - esalman 11mo ago
      Your argument is so baseless that even a template AI response can refute it. Yes, the DoE has been planting decade-scale workforce seeds since the Carter years—mostly via STEM/CTE programs that outlive administrations. Core idea: build adaptable skills (problem-solving, digital literacy, work-based learning) so kids & adults can pivot when AI/climate/whatever nukes today’s jobs. *Carter-era kickoff* - 1979: Science and Engineering Education Act (Carter signs) → first federal push for pre-college STEM pipelines. NSF/DoE joint grants still fund teacher training 45 yrs later. *Reagan/Bush I* - 1983 A Nation at Risk → DoE launches magnet schools & AP incentives. Many still running. *Clinton* - 1994 School-to-Work Opportunities Act → seed money for apprenticeships. morphed into Perkins. *Bush II* - 2006 Perkins IV → “programs of study” with stackable credentials. Still the backbone of high-school CTE. *Obama* - 2010 Race to the Top → $4B for state STEM/CTE alignment. - 2014 Computer Science for All → CS now in 70% of HS nationwide. *Biden* - 2022 YOU Belong in STEM + 2025 DOL/DoE joint admin of WIOA/Perkins → less red tape, more training $. *Impact numbers* - Perkins V: 8M HS students/yr in CTE; 1.3M postsecondary. - WIOA adult ed: 1.5M/yr gain credentials. - Meta-analyses show STEM exposure → +0.2σ critical thinking, +15% lifetime earnings. *Caveats* - Funding is ~$16B/yr total—peanuts vs GDP. - 2025 DoE staff cuts (≈50%) threaten oversight. - Europe still laps us on apprenticeships (3-yr paid tracks vs US 6-month internships). Bottom line: DoE’s been playing the long game since disco. The programs work, but they’re chronically underpowered and politically fragile.

iancmceachern 11mo ago

Hardware companies often operate on a relatively thin margin, especially as compared to say, software companies. Let's say a companies margin was 40%. The cost of their constituent parts doubles due to tariffs, they are no longer making money as a result. I hope this helps explain it for you.

WalterBright 11mo ago
It's more complicated than that. For example, the company can raise its prices. How well that works depends on whether there is competition for the company's product. If the competition is also hit by the tariffs, then they're on an even playing field. If the competition is using native parts, then the competitor gets the business.
- iancmceachern 11mo ago
  This is one of the great misconceptions. There are often no "native" alternatives. Even the machines that make the chips are nearly all made in one country and then shipped around the world. The amazing, modern nature of our modern world is built on the collective effort and knowledge of humankind globally. Globally.
  - WalterBright 11mo ago
    There's concern that if all our chips come from one country, they could cut the supply off and make demands. That's called an "embargo". It's also done to protect local industries, hence the term "protectionism". For example, Canada's large tariffs on American milk are there to protect the local Canadian milk producers. AFAIK, Trump's tariffs are meant to serve the following purposes: 1. so critical supplies, like chips, will be produced domestically 2. to raise money for the treasury 3. to convince countries that have high tariffs to lower them in exchange for the US to reciprocate in lowering ours 4. to incentivize foreign manufacturers to invest in factories in the US 5. to use them as a negotiating tool for other terms favorable to US interests These are not crazy things. We'll see how things play out.