Raise your hand if you’re a fan of European hand tools from brands like Knipex, Wera, Felo, NWS, and others.
Well, there’s a very good chance that many European hand tools are about to get more expensive.
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There might not be any price hikes, but it looks like there will be additional import taxes of 25%, and at least one brand has said that they “won’t be able to absorb that much.”
I hope we don’t see price increases, but there’s a very real chance that we will.
Carlos recently wrote in:
As a fellow German tools enthusiast I wanted to bring to your attention that the office of the United States Trade Representative announced on October 2nd that certain products from the E.U. would be subject to additional duty rates of either 10% or 25% effective October 18 pursuant to Section 301 enforcement of U.S. WTO Rights in the airbus subsidies trade dispute.
The federal register notice containing the list of products was published on October 9, 2019 and is available on this hyperlink:
https://www.federalregister.gov/documents/2019/10/09/2019-22056/notice-of-determination-and-action-pursuant-to-section-301-enforcement-of-us-wto-rights-in-large
Most of the products included in this publication are not relevant to the subject matter, however, I would like to point out that Part 11 covers products of Germany, subject to a 25% duty rate when imported into the US after 10/18/2019.
Among others, this would include: pliers, tweezers, shears, screwdrivers and several other hand tools.
I became a fan of German hand tools after hearing about KCTOOL in this forum and since then I have never looked back. It has always been my opinion that while their cost is a bit steeper than what we might be used to, the quality is worth it.
It is a bummer that prices could potentially increase even more due to this duties.
Looking at the document that Carlos linked to, I do see that quite a lot of German hand tools will be subject to added tariffs.
Products of Germany subject to additional import duties of 25% include:
- Axes, bill hooks, similar hewing tools (other than machetes)
- Base metal tweezers
- Pliers, pincers, and similar tools – but not slip-joint pliers
- Metal cutting shears and similar tools
- Pipe cutters, bolt cutters, perforating punches, similar tools
- Screwdrivers and base metal parts thereof
- Knives other than fixed blade
- Base metal blades for knives other than fixed knives
- Tools for working in the hand, pneumatic, other than rotary type, for metalworking, and other than for metal-working
- Machinery or parts of machinery for soldering, brazing, welding, not gas-operated
Products of Germany and UK subject to added 25% import duties:
- Self-propelled backhoes, shovels, clamshells, and draglines, and other machinery with a 360° revolving superstructure
- Electromechanical tools for working in the hand, other than drills or saws, with self-contained electric motor
Chad’s Tool Box, an online retailer, shared news from one of their suppliers in a Facebook post. Here is the part that quotes one of their tool suppliers:
As you may have heard, the US Government has recently decided to impose new Import Tariffs against certain Products from the EU, these are supposed to come into effect Oct. 18. Amongst a lot of items from different countries, some hand tools from Germany are included, currently it looks like screwdrivers and most of our pliers plus some other items, BUT, as of right now, torque products, wrenches and sockets are not included, I’ve attached the official document for your reference.
The tariffs will add 25% to our cost, we definitely won’t be able to absorb that much, but will continue to monitor the situation and will inform you in detail if and how much we have to increase pricing on the affected products.
If I’m reading the US Government documentation correctly, the tariffs will affect things like Knipex Pliers Wrenches, NWS pliers, Wiha screwdrivers, and a whole lot of other tools.
Now, what is this all about?
On April 12, 2019, the U.S. Trade Representative announced the initiation of an investigation to enforce U.S. rights in the WTO dispute against the EU and certain EU member States addressed to subsidies on large civil aircraft.
And:
the WTO Arbitrator issued a report that concluded that the appropriate level of countermeasures in response to the WTO-inconsistent launch-aid provided by the EU or certain member States to their large civil aircraft domestic industry is approximately $7.5 billion annually.
From the investigation:
U.S. Trade Representative has determined, under sections 301(a), 304(a), and 306(b) of the Trade Act of 1974 (Trade Act) (19 U.S.C. 2411(a), 2414(a) and 2416(b)), that the rights of the United States under the GATT 1994 and the SCM Agreement, particularly Articles 5 and 6.3 of the SCM Agreement, are being denied; that subsidies provided by the EU and certain member States violate, or are inconsistent with, the provisions of these agreements; and that the EU has not satisfactorily implemented a recommendation of the WTO DSB.
In simplistic terms, this all stems from a dispute where Boeing was found to be at a competitive disadvantage against Airbus in the civil large aircraft industry, which if I’m understanding correctly, received unfair subsidy advantages.
It was then determined what the response would be:
the U.S. Trade Representative has determined to impose additional duties on products of certain EU member States, as specified in Annex A to this notice. The annual trade value of the list of tariff subheadings subject to additional duties is approximately $7.5 billion, which is consistent with the WTO Arbitrator’s finding on the appropriate level of countermeasures.
Again, if I’m understanding this all correctly, it was determined that the US, with WTO approval, will levy tariffs on products by EU member states, including specific hand tools.
A whole lot of cheese, dairy, and pork products are also subject to the new tariffs.
Nearly two years ago, I wrote about new tool box tariffs affecting many big brands’ imported ball bearing tool chests and cabinets. Because of those tariffs, consumer tool boxes greatly increased in size in order to be exempt from the rather sizable tariffs.
But, with those tariffs, the added duties were quite high, such as ~96% for some brands.
With these tariffs, 25% is a lot, but it’s not quite the same as nearly 100%, which I would simplistically interpret as a doubling of import costs.
If I had to guess, I would say that price increases are highly likely, although they might not be inevitable. There is also the possibility that the US government and EU officials will come to some sort of agreement, if they haven’t already.
Sean says
I love German tools but if they continue to climb in price than I’m going pass on any new purchases.
DC says
Ditto
Flotsam says
The amount of foolishness involving tariffs is incredible. I don’t see any of the tariffs accomplishing anything, only retaliatory tariffs.
It seems like they forget the American people pay these tariffs and somehow the US is going to instantly create a source for these goods as a substitute. It is just such a simplistic attitude.
Frank says
The US already has a “source for these goods”, American manufacturers. Placing a tariff on foreign products puts an incentive on buying domestic product.
Hilton says
It also allows the local manufacture to raise their prices without an increase in quality. There’s a point where you’ll throw in the towel and go back to purchasing the now more expensive import. Hoping for you guys that you don’t get screwed though.
Todd Jones says
Correct. Rather than improving American products to increase desirability, we’ll artificially raise the price on superior products to price them out of the market. Pro strat.
Bart Youngblood says
Is there an equal domestically sourced alternative? I would argue that some of those manufacturers have a fairly unique products. That argument really only holds water if you are comparing fairly generic products, ie., a basic set of pliers, or a basic screwdriver.
Show me where I can get a set of domestically sourced pliers that are nearly identical to Knipex Cobras.
Tariffs are one of those things that sound good in theory, but in reality, don’t work well outside of an academic setting. Again, you have to not only be comparing apples to apples, but the exact same variety of apples to each other for the assumption that a tariff will increase domestic demand to work.
mattd says
I was gonna say to try out klein’s water pump pliers, but alas they are also made in Germany.
Max Musial says
I wouldn’t be surprised if this is the case for a large number of items. Yay global supply chains and manufacturing agreements….
I for one am thinking I need to buy more Wera Bits stat since I can’t think of a decent made in the US brand.
Phil says
CHANNELLOCK!!! Made in USA!!!
Flotsam says
What that type of logic fails to recognize is that the countries on which the tariff is being raised turn around and establish their own retaliatory tariffs . Witness what is happening to Farmers who have seen a major reduction in the amount of agricultural products they can ship. Farm foreclosures are up 13% from last year alone. Taking this “tariff revenue” and giving to effected farmers as compensation is the most sinister form of socialism don’t you think?
No one wins with this policy.
Doc John says
Of corse we win
Its a long term play
These pages are filled with the destruction caused by Chinese and similar low quality tools.
Strange that one would be anti well made tools
Flotsam says
That’s a pretty simplistic attitude. No one (especially here) wants crappy low quality tools. But that seems to forget that we can make some pretty low quality things here just as easily & for a long time (witness those old Globemaster tools some made in USA) .
China can just as easily make top of the line tools as well and frequently they do and in many cases for “US” based tool manufacturers. Taking this us versus them mentality and only having tariffs as the ONLY tool they use in trade is just a very bad idea.
928er says
This is what happens when you have an idiot and a “economist” from Fox news controlling trade policy.
Gilbert G. says
Amen to that!!!
Kent says
I’ll rush right out an buy some US made Knipex pliers. Oh, wait – nobody here makes pliers like that.
I’m building a house and shop at the moment, and want a steel roof. The price of steel roofing went way up – no matter than company I buy it from, or where it’s made.
The Chinese stuff went up because of the tariffs.
The US made stuff went up because the price of the competition went up.
Tariffs are not as simple as some folks are telling you.
Mike says
Reducing competition reduces QUALITY.
alex says
Hopefully, the prices will remain the same here in Canada 🙂 I wonder if the tariffs will be applied if you order from here to the US?
Tyler D. says
We’ll be road tripping to Canada or getting buddies abroad to get us tools.
Hilton says
One thing I have noticed is that all my imports from China to NY from July 2019 onward now attract Sales Tax. Before there was nothing.
In particular from AliExpress.
fred says
I believe that NY State (perhaps other states too) – won a lawsuit that they are due sales tax for items shipped to addresses in their state(s) The Law had a grace period before it took effect – but as you note started in July. I also heard that there is a threshold for sales – so small merchants that ship few items – may not need to comply. But Amazon , eBay and others are being mandated to collect sales taxes even for sales from third-party vendors. If you are tax exempt or buying items that are considered all or part of a capital improvement – you can complete the appropriate paperwork and avoid the sales tax.
Hilton says
Thanks Fred.
Kizzle says
Well, this will be passed directly on to the consumer. Despite what some people say, CHINA AND GERMANY DON’T GIVE US THIS MONEY. There are some people that’ll have you believe that tariffs are just cash that other countries pay us. lol. And before anyone says that this will make people buy American products….please. Until the US starts producing anything on par with brands like Knipex and Whia, I’ll keep buying those products. Instead of punishing the consumer, why aren’t the companies held accountable for shipping all production away? They’re generally rewarded for doing so, while we pay more for the items that cost them less to make.
Bart Youngblood says
Someone who gets it.
A tariff is meant to incentivize buyers to source elsewhere.
For the consumer who has no other choice or does not care for the alternative, they either buy it anyway, or not at all. In the former case, it is just another tax.
mrt076 says
“Products of Germany and UK subject to added 25% import duties:
…Electromechanical tools for working in the hand, other than drills or saws, with self-contained electric motor”….
Wouldn’t this then apply to Festool items such as the Domino, Sanders, along with items from Mafell???
DC says
I better hurry up and get that Festool Domino and T55 track saw.
Frank D says
That’s how it reads to me as well.
As, I’m hoping for Bosch to bring more 12v items to the US.
Kent says
Is the Domino made in Germany or China?
mrt076 says
All German
Altan says
Well, If some companies say “won’t be able to absorb that much.” that means they can give up from importing and selling German tools in the US, that will make a quick change in the income that German brands regularly have, and until they find new importers in other countries they can drop their prices in their existing markets including EU itself to sell more. So if it works like that, this suits me I would say. I would buy German tools cheaper in UK then 🙂 So I should wish for 50% import tax for German tools in US?!
Mnoswad says
Should it be emphasized when talking about tariffs that the percentage amount is not an increase of actual retail price?
Knipex plies shouldn’t cost 25% more at the the store but will go up enough to notice.
AlexV says
That’s right, in today’s global supply chain it is unlikely that the retailer will immediately decide to go for a 25% sales price increase due to tariffs.
Usual strategy would be to request a discount from the supplier in order to ‘share the pain’ and avoid passing the complete 25% discount to the end consumer.
Jim Felt says
The US can’t magically create better tools (we’ve lost that potential infrastructure decades ago to Wall Street’s need for corporate “profits” and consolidation) and the “average” retail tool buyer has never much noticed.
“We” here have.
P. S. I’m still a big fan of Klein and Milwaukee Made in America production. Actual ownership never seems a reliable predictor of “stewardship” unless a predatory hedge fund is involved.
MattF says
SBD better get going on that US Craftsman production.
US Klein will probably increase prices because they can, they are paying more for steel after all.
This will certainly pour investment dollars into US production. Let me sit back and watch this…
Well it will take awhile for this one to unfold, the steel guys have been at this for a bit, how do they look? https://enforcement.trade.gov/steel/license/documents/execsumm.pdf
Check out page 4 for the trade balance…
Robert says
Channellock, Klein, Western Forge / Pratt&Reed / SK, Wilde and etc aren’t in the same league as just about every German/Swiss plier and screwdriver manufacturer.
Brandon says
Perhaps no, but for the VAST majority of users here in the US, tools of those brands aren’t necessary. I have been more than satisfied with Channellock, Klein, WF, PR, and/or Wilde for decades as have millions of other Americans.
Kent says
Are you actually saying that I shouldn’t buy Knipex because other brands are “good enough”?
With all the false claims of socialism I’ve been hearing lately, being told to buy an inferior tool because I don’t really need the quality that I want seems rather odd.
Brandon says
I’m not saying that, you are free to buy what you like, and I feel these tariffs are ridiculous, even more so when the average American thinks they’re not the ones paying them. For the vast majority of people who’ll use a set of pliers, Knipex is overkill. I’m also not saying to go out and buy cheap tools either. I AM saying the brands of tools such as what I listed above are more than capable for what the vast majority of people will ever use them for and will be for years to come.
For many of the people I’ve know to have German made tools, and Snap-on and Matco, ect, they really have done nothing more than lighten their wallet for a tool they didn’t need to spend that much on. I will not say that for everyone as that is my general observation of several people I’ve acquainted myself with over the years. With that being said, I do have a lot of middle and some high end tools that have been serving me well for years and will not fault anyone for buying what they like… Just my .02.
Doc John says
We can regain it Jim Felt, we can regain it
Jim Felt says
BTW in the advent of the UK’s eventual(?) Brexit won’t the US/EU tariffs no longer apply to the UK?
What tools does the US still commonly source from the UK anyway? Record? I dunno any.
Altan says
UK does not produce and export the things that are commonly known/seen, Bentley and Rolls Royce are two examples. Lots of Rothenberger plumbing tools are produced here in the UK, Another brand called Monument makes UK made plumbing tools. Some parts used in DeWALT tools are produced in UK, Lots of Makita’s tools are produced in the UK, It seems almost half of the utility knife and snap off blades are made in UK (DeWALT , Stanley and etc.) Trend is another British brand which makes quality products.
Snap On tools are sometimes better than Knipex but extremely expensive.
Ben V says
There’s a really good Top Gear episode that details all the car industries the UK is part of. It’s pretty impressive.
ktash says
Chisels made in Sheffield, various brands. Do they still make them there? Not sure, but were decent and decently priced.
Doc John says
Great Sheffield pocket knifes too
Made in UK
yadda says
yadda says
sigh
PJ says
Anyone who has ever had an international order on eBay and looked at all the import and other fees the buyers have to pay then conversely bought something on eBay from China for $0.99 and free shipping would understand why these tariffs are necessary. Albeit the example is small scale, its easy to get a taste of how impossible it is to make something in America and sell it to anyone outside of America.
MattH says
Another part is that the US has stopped raising and teaching true tradesmen. Metal is imported and nothing of quality is made, what is of any quality is wayyyy to expensive for over 60% of the population. Why would someone buy those pliers for say $75, when you can buy these for $12. If america wants to truly compete or bring itself back up. Those $75 quality pliers need to cost closer to $35.
Altan says
I am happy to pay 1000 USD for a DeWALT corded/cordless 120V Flexvolt Toughsystem compatible Wet/Dry Vac/Dust collector, a complete system with all accessories included, also adapters and all stored inside the Vac. made in USA. I have no problem with higher price generally, I just want quality tools. I don’t want to have headache with warranties and things like that.
Max Musial says
I think you’ll find those are assembled in the USA with Global Materials. But I may be misremebering.
Altan says
I mean generally, by now made in Czech Rep. DeWALT tools were the best DeWALT tools I had.
MattH says
For those who could afford that, great but that limits the potentional market greatly with that price point. I understand quality tools and the more diy i did, the more having quality tools helped, or can even be required became evident. After some years of being on my own, i had started realizing why my dad paid the prices he did for his tools at work. Knipex, snap on, etc. (He was a gold master auto tech for 30 yrs, now he owns his own boat repair shop in VA) its not something i could ever afford. Such is life i guess though, nonetheless prices would need lowered and quality raised in order to shift buyers to domestic products.
Altan says
That is why I believe DeWALT should make tools in different levels. They all use the same battery but different qualities, look how many drills they have, different prices, the more you pay the better drill you get, can be the same with Vacs and other tools like planers. Why just one type of planer?!
LG says
How do you like it? My friend has a mini Wilfukee that he grabbed for 99$ w/ a battery (no wet ability I believe) it so convenient to have all the parts+battery (even my 12ah fit!) inside. Carrying it around to clean before I lay base/shoe down! Love it! Thought the big boy flex would be my goto… attached to my flex12”slider & tablesaw! One can dream aye?
James C says
To further complicate the bigger picture here, consider all the tax incentives Boeing gets from state and local governments. There are carrots and sticks all over the place. The system is now so complex I’m not sure how anyone could have it all figured out. It’s bad enough looking domestically, but when you look internationally it’s completely mind boggling.
Nathan says
considering the same countries issues tariffs or taxes on US made goods coming to them I’m mostly OK with the idea.
Provided we are leveraging an equal tariff and I’m not 100% sure. But yes Germany taxes some US made goods – I’m sure tools are part of that list.
I’m all for equal tariffs especially once they become 0.
Sorry it will impact some tools I like and might purchase but overall I’m OK with the idea.
mla says
This is my sentiment. Match tariffs for tariffs. If they drop theirs, we drop ours.
Scar says
Germany doesn’t assign tariffs, the EU does. And the EU tariffs are minimal compared to this.
Hand tools are 1.7 to 3.7% depending on the type of tool. Some have exemptions depending on the industry (meaning 0% tariff).
All of this is available on via TARIC database
https://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp?Lang=en
The code for hand tools is 8205
Nathan says
partially true each member country can still levy their own additions on top of EU base values or even add specifics. SO yes Germany can add on top of EU tariffs.
Germany for example puts tariffs on British cars for example. That’s outside of any EU allowances.
But regardless my comments aren’t so much about germany specifically it’;s a global application. I want tariffs on Korean Appliances, and other things. Tit for Tat and all that.
DannyK says
The global economy seemed to do well post Great Recession. Why tariff? Now the Fed is forced to deal with a slowing economy. For people who say this is no big deal, doesn’t affect them much, it will, once recession kicks in high gear. Back to tools, consumer should have free will to choose tools from other countries without being punished in higher sale tax. Competition leads to innovation.
LG says
Jeez this is horrible, it always trickles down to the consumer. I’ve just started to crack into my German tool collection with major plans for the future! After months of contemplating plier wrench prices, I have found myself now content with the $45-90 price tags, With eventual plans to grab a few more sizes down the road! Someone’s comment I read at one point said certain German hand tools purchased off amazon.de (or whatever their amazon address is) can potentially be a few bucks cheaper atm even with the shipping (not everything will ship obv) but maybe that’s a potential loop hole? I have a whole list I’ve been making of hand tools I’ve been eyeing…now this has me feeling like I have to expedite my “eventual” plans to having to now pull the trigger asap… yikes
DC says
It’s basically the result of tit for tat. The WTO ruled that Airbus was/is getting government monies but so is Boeing, just not obviously. They get tax breaks and possibly non-bid government contracts. If Lockeed Martin wins a contract, Boeing is the sub-contractor.
Flotsam says
The thing that doesn’t make sense is that the list of effected products includes Italian cheese for instance and there are no Italian Airbus facilities. Tariffs seem like a hammer that is not very selective.
Brian says
Yes, there is.
https://www.airbus.com/newsroom/press-releases/en/2019/09/space-engineering-becomes-airbus-italia-spa.html
Space Engineering is an Airbus subsidiary, now changing it’s name to Airbus Italia
Mike (the other one) says
Tariffs hurt the consumers more than anyone else. They have to pay higher prices for imported items, but once domestics realize they can charge more, they generally will, so then those prices go up too.
The whole point in trading with other nations was to expand the market and create competition, which gives consumers more choices.
Tariffs will not fix this. Sure, China can make pliers for $.99, but they last a little longer than it takes to get them out of the packaging. People who need quality are going to be looking at something else anyway. But the reason China can make stuff so cheap is because they use low-paid or actual slave labor. That is what needs to be addressed, but they have no motivation to do so, since no one seems to care about that.
Nathan S says
Stuart, a couple months back you previewed Channellock Speedgrip pliers. A quick search reveals Channellock also now has Griplock pliers available. Perhaps now is a good time to do a comparison with Knipex, etc.?
Ray CR says
The U.S. Is trying to De-couple or
Uncouple from mainland China.
Why? Did you see the military parade with supersonic missiles that can change vector that we don’t have yet. 3 weeks age. Did you see their cruise missiles and all their other hardware on display? We fed them now we have build our own to match or surpass them.
So their products were not so cheap after all with the new defense outlays are factored in .
Better that the 10 other Asian countries such as Vietnam ,Malaysia, Taiwan etc supply us. Even a Harbor Freight official off the record said they are trying to produce more in India and Taiwan.
Ray CR says
https://www.dailymail.co.uk/news/article-7523979/The-worlds-powerful-nuke-array-new-weapons-unveiled-China.html
Look at all of China’s new toys several of which we have not built equivalents yet. The ones that can reach us in 30 minutes are really disconcerting. That is why I try to buy from Taiwan . It is the law of unintended consequences.
Regarding Chinese farmers, the African Swim flu looks like to wipe out half of China’s pork production. They do not use western farming methods that reduce the spread of This flu. Their middle class has gotten used to eating regularly so the pressure is NOW on to buy pork from overseas including from us.
In China many farmers have their ‘barns ‘ attached directly to their houses and that is why infectious disease specialists lose sleep at night thinking about new varieties of bird of swine flu crossing over to humans.
ktash says
I was hesitating on the Wera Advent Calendar. This post pushed me over the edge. I decided to get it because I love Wera tools (the few that I have. ) . Wiha and Wera bits and drivers, etc., make a difference, even for a hobbyist and diyer.
Tomo says
Wera generally aren’t made in Germany though so doubt they’ll be affected. They’re either Asian or CZ (which is the China of Europe anyway).
Paul says
Some of the commentary on this is very funny. I have to point out a few things:
1. 80% of the new specialty steel produced in the WORLD comes from North America. When I say specialty this means tool steel. Not China…they can only produce quality meeting what we consider construction grade. Over here we make that with off spec steel or remelting scrap steel to just recycle it. Over 80% of steel consumed in the U.S. is recycled. The demand has shifted towards other materials (plastics, other alloys) and so much of it is now recycled that naturally a lot of the blast furnaces in the world never mind the U.S. have shut down. But as an example check this out:
https://goo.gl/maps/njnZT2bhJHHdxTE3A
This is North American Stainless which produces some of the highest grade stainless steels in the WORLD. This plant didn’t even exist 25 years ago. It’s in Ghent, Kentucky. Can’t get any more American than that.
2. CNC was INVENTED by Cone Drive, a large transmission and gearing manufacturer in Traverse City, Michigan. Cone now has a line of high performance harmonic drives that is arguably the best in the world being used to build robots. A harmonic drive is so ridiculously high end they basically pushed measurement technology to the limit and then had to essentially invent new machining technology just to build them.
3. We invented the internet. And the blue LED, and then the white LED. All here. In fact does anyone know produces the most technologically advanced LED’s and invented the blue ones? Cree. Where are they? Durham, NC.
https://goo.gl/maps/h8boV4VWzyjmNcud6
4. Have any of the naysayers as far as machining and tooling goes ever been to Milwaukee? The whole city is nothing but a baseball stadium and a huge pile of machine shops everywhere. Milwaukee is about as “dead” today as it was 50 years ago. The suggestion that the technology doesn’t exist in this country anymore is beyond crazy. And where do you buy your 3D printers? Yep, those Americans again.
There is a real problem though. As a country, every country uses tax revenue in all kinds of ways to either grow businesses in their country organically by funding research, low interest loan schemes, various tax abatement schemes, and sometimes outright subsidies. Right now we pay farmers on average to plant only about 50% of the available crop land. As GDP grows, so does the tax base, and it’s also a political weapon to get votes. But in the long run it has severely weakened and crippled American farmers. Think of how it twists the economic model. With those kind of subsidies most of their “profit” is where the government is paying them to grow nothing. They are growing a crop on the rest of the land merely to qualify for the subsidies next year. In fact it almost doesn’t matter if they take a loss on the land they are actually using. The problem is that the subsidies are paid based on the money made in the previous years on the land that was in use. So if the price collapses due to a trade war, they get a double whammy because the subsidy also collapses. In finance this is called leverage and this what what gets people in trouble with trading options. Because the effect of profit/losses on the real crop grossly amplifies the profit on the subsidies. One bad year drives them out of business. So it’s driving farmers out of business but to make them financially solvent we have to both end subsidies in our country (and tariff anyone else that does it to protect our domestic producers) and somehow allow prices to naturally go to “normal” levels while withstanding the political heat from ballooning food prices.
The same thing happens everywhere. The problem is that everyone is incentivized to do it and the only way out is mutual agreements to end both subsidies and tariffs on both sides simultaneously. Unilateral trade agreements are stupid because doing them screws the side doing them. If the US were to unilaterally drop farming subsidies, the export market would collapse and farmers go out of business. If China dropped tariffs we would flood their country with cheap food and drive their local farmers out of business. You can do unilateral trade agreements only if it’s a “if this then that” arrangement…the 25% tariff goes away if EU reduces the Airbus subsidies for instance.