Meet Daniel Rogge, CEO of Tormach, a machine-tool maker. 
Please consider How Tormach Tried to Get Ahead of Trump’s Tariffs.
Machine-tool supplier Tormach has raised prices twice this year on some products. The small Wisconsin manufacturer asked a landlord to alter a lease. Then it told staff it was reducing 401(k) matches and eliminating some bonuses
Tormach thought it was prepared. The company tried to get ahead of a potential trade war by shifting production from China to Mexico, where it bought a factory in 2023. In August, it boosted its stockpile of Chinese-made goods by 20% to blunt the possibility of fresh China tariffs, squeezing its cash flow. It sped up plans to triple production in Mexico.
Then, in early February, President Trump announced new tariffs not only on China, but also on Mexico and Canada. “This is a worst-case scenario for Tormach,” Chief Executive Daniel Rogge wrote to employees the morning Mexican tariffs were slated to take effect. “A prolonged trade war with both Mexico and China is a severe blow to our business model.”
Soon after Rogge sent the Feb. 3 email, Trump paused tariffs on Mexico and Canada for 30 days. However, an additional 10% tariff on Chinese imports such as Tormach’s machine tools kicked in a day later. On Feb. 13, Trump ordered federal agencies to explore reciprocal tariffs. On Thursday, the president said he planned to impose an additional 10% tariff on imports from China and he was moving ahead with the 25% tariffs on goods from Mexico and Canada next week. Tariffs on steel and aluminum are set for March 12.
“Whipsaw. That’s an accurate description,” Rogge said in an interview. “Can we please, God, know what’s going to happen so we can plan accordingly?” he said. “What I want is no tariffs. What I want after that is certainty.”
Tormach is relatively small, with about 100 employees, split between the U.S. and Mexico, but its efforts to respond to fast-coming changes in trade policy threaten to ripple through the economy. Many of its customers are startups and small businesses that buy Tormach’s low-cost machines, typically priced at $10,000 to $50,000, then graduate to more expensive ones.
On Feb. 19, Rogge told employees the company was reducing spending on marketing by 25%, trimming the company’s 401(k) retirement savings plan match and eliminating work-from-home stipends and anniversary bonuses. “It beats laying people off,” Rogge said. Tormach has been employee-owned since 2014.
Korn, Tormach’s co-founder and chair of its board, has been working for roughly three years on a new design for a machine tool that Tormach could produce in Mexico at the same or lower cost as machines made in China. Perfecting the design could take a further six months, he said.
Korn said he shrugged when Rogge recently asked whether the new machine could also be made in the U.S. “It’s much easier for us to shift our focus to foreign sales to take advantage of Mexico’s stability and free trade,” Korn said.
Small-business confidence plummeted in February, posting the largest monthly drop since the start of the Covid-19 pandemic, according to a survey of more than 400 businesses conducted for The Wall Street Journal by Vistage Worldwide.
Fifty-four percent of those polled said that tariffs would negatively affect their companies, while just 11% said they would benefit, according to Vistage, a business-coaching and peer-advisory firm. Nearly one-third said the economy will worsen in the coming year, more than double the share that had said so in January.
Trimm, a Youngsville, N.C., maker of power-distribution products, is scaling back efforts to expand international sales this year. “I don’t want to invest the time and find we will get slapped with a reciprocal tariff and our market just went away,” said Will Newton, the company’s president.
This week, Trimm started holding price quotes for 14 days instead of 30 days. The 48-person company is looking for ways to redesign and source parts locally to avoid tariff-related cost increases on specialized electronic components imported from Mexico and Canada. “We have no idea what is going to happen,” Newton said. “Because of this, we will conserve capital and focus on short-term projects with more immediate paybacks.”
Tormach Coping Synopsis
- Reducing spending on marketing by 25%
- Reduce 401(k) retirement savings plan match
- Eliminating work-from-home stipends and anniversary bonuses
- Shift focus to foreign sales to take advantage of Mexico’s stability and free trade
Multiply that by tens of thousands of small businesses.
Fifty-four percent of small businesses polled said that tariffs would negatively affect their companies, while just 11 percent said they would benefit.
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The reinstitution of aluminum and steel tariffs across the board is in direct violation of Trump’s loudly bragged USMCA “Best Trade Deal in History”.
Trump has proven ability to repeatedly make the same mistakes, needlessly taunt allies, and violate his own treaties.
No good, and lots of bad will come from this, just as happened before, only worse because of Trump’s threat on reciprocal tariffs on everyone (with no real definition of that).
It’s no wonder US Consumer Confidence Drops at Sharpest Pace in 3-1/2 Years
I’m not an expert in these things, but perhaps some things just need to cost more if people want them made in their own country.
Go to any city in Europe or (even more so) Japan and people are driving mid-size or small cars that perhaps cost $20,000 or less. Meanwhile Americans seem to need an enormous SUV or Ford pickup truck costing $80,000 or more. And they live in McMansions with private swimming pools.
On the other end of the scale, a NY friend spends $10+ a day on coffee at little coffee shops. He can easily afford it, but many others are doing the same without his income. (I recall a young IT worker in a London hospital, who was spending £8 per day on two cups of coffee in Costa Coffee [a Starbucks clone]. About £2000 per year… insanity!)
Priorities, folks!
(Here endeth my Scrooge-like rant.)
This sample story of Tormach is actually proving Trump right.
As I read above company was preparing themselves by shifting production form China and building production plant in Mexico. So this is a point, if we block China, everybody moves to Mexico, if we block Mexico everybody will move to Brazil, if we put tariffs on Brazil everybody will move to Colombia and so it can go forever.
Either we remove all roadblocks or put it everywhere for it to be effective.
IF that company is selling to American customers why not to build factory somewhere is USA. I don’t see this discussed anywhere and this is a heart of problem, not tariff. Why this company cannot build production plant in America instead?
Unfortunately because of such folks like above tariffs will also put on products that cannot be produced in US or genuine foreign businesses (say Swiss watches) and will impact such things, which should not be impacted.
Unfortunately there are 2 options here. One is that USA will support local companies, and right now only real option is tariffs as we cannot compete on prices.
Another option is significant reduction of standard of leaving, wages and overall cost of making businesses in USA so we can compete with those cheaper countries without tariffs.
I don’t think tariffs will work long term in my view but I guess it is safer politically and socially to try it instead of causing some sort of deep depression just to Make America Competitive Again.
Apparently 25% tariffs are fluid and judgemental to Trump on March 4th. Maybe that works with contractors in real estate projects but surely not for whole countries and continents. We are dealing with highly tuned trade flows. Either mess with it or don’t.
Mess he will. The consequences are obvious. Do you care? I do.
The more the state plans, the harder it is for the individual to plan.
-Hayek
I, for one, am looking forward to Trump’s tariffs this week and many more to follow. It is a real world economics experiment, and the results will tell us whether tariffs are a good policy or not.
According to Trump they will bring back manufacturing and jobs, pay off the deficit and debt, allow us to eliminate income taxes, make SS and Medicare solvent, and make us all rich. With a list of benefits that wonderful, who wouldn’t want to give it a try?
And if it blows up in our faces, at least we will learn from it.
Trump still needs to significantly reduce the military budget. It increased from 700 billion to 850 billion in 3 years.
Close everything overseas and bring the troops home. Then downsize the arsenal to what is needed to patrol our own borders. That should enable at least a couple hundred billion in savings. Take the savings and pay down the federal debt. Since all money is created through debt, paying the debt off destroys the money . Wash, rinse, repeat. Hello, strong dollar.
This has been David Stockman’s point for years. With some troops and an effective nuclear deterrent (including submarines) US defense could be done for $300B or less. Getting rid of ALL the overseas bases is a critical first step.
Time will tell if he can manage to do that.
I admire your dedication to the advancement of economics by rigorous experimentation.
Thanks. It’s going to be fun to watch how it all plays out.
The US should do what they think is needed. It’ll be educational for all.
US has a number of interesting forays going at the moment.
Tariffs did not work so well the last time the last time they were tried – re: the 20% Smoot–Hawley tariff in 1930.
History repeats.
The parallels between the late 1920s and today are eery.
recent pandemic and all the backlash
Banker panic in 1907 vs great recession of 2007
Global migration and nativism
Peak of Globalization
A new era of innovation
Sometimes we have to repeat the mistakes of the past, to reinforce the lessons learned.
Or; maybe it will be different this time and Trump’s tariffs will do everything he said they will.
1) Trump force Daniel Rogge to do the right job: rollback rent, cut entitlements, cut ad
budget by 25%, cut WFH, speculate on Chinese inventory and triple production…
2) Trump forced the EU to increase their military budget. They are home alone. Meloni: Trump splits us. He wants to make a deal with Putin without us. Merz might please Trump and form a coalition with the Nazis. AfD is pro Putin as a better alternative to a war with Putin. Merz will rule Germany with a huge majority. Trump centrifugal forces recalibrated the EU, They will change the EU creed.
3) During Passover Hamas might return 48 hostages – 20 alive/38 dead – after returning 200 out of 250 in the previous deals. Hamas might stay put to rule 2 million Palestinians with an iron fist. Trump’s Witkotf is for peace. The risk of a war with Qatar, MBS and Al Sisi military forces, if they rule Jasa, is higher than a war with Iran and Hezbollah. Bibi might get out of the casino table and take his profit.
Why do we even care about a few hostages. Much more bloodshed is occurring elsewhere.
Is Afd really pro Putin? Disgraceful if so. That is being pro dictator because Putin doesnt allow his people a free fair election.
300,000 illegal immigrants released into the US per MONTH during Biden’s watch. That’s not counting the hundred of thousands that got away. Add those to the number that were let in during Obama’s two terms and you discover the true magnitude of the invasion.
Now double that number to account for all their offspring and place them all on medicaid, food stamps and housing assistance. Finally add the cost to educate the children at the highest rate in the world (~20k/student) and you have found the reason for our nation’s financial woes.
Yep, and these pesky invaders, on top of it, are all on Medicare and Social Security,
Medicare, medicaid and Social Security are not going away. But luckily we only need to rid ourselves of democrat fraud and grift to save the day.
You should thank Elon Musk and Great Balls that they have figured out that illegal immigrants are registering as 150 years-old to suck the blood out of our minimalistic welfare state.
Yep, the 401(k) match is always the first thing to go. Experienced that myself, more than once.
How interesting – the comment that Mexico’s economy is more stable than ours.
CBS had a show called Undercover Boss. A show featured Peavey Electrionics. Shortly after the show was recorded, the featured factory was closed and the production moved to China. This happened over and over again at U.S. manufacturing companies.
In local news, Technicolor is closing its Culver City facility, according to Variety. Technicolor had filed for chapter 15 bankruptcy in 2020. Technicolor had a facility nearby Universal Studios, but i don’t recall seeing their sign, the last time i had driven past there.
https://variety.com/2025/film/news/technicolor-begins-to-shut-down-1236319436/
What Trump and the administration should be working on is how to decrease red tape and taxes for American businesses. The problem is that we have this fading idea that military is the answer to all. We have spent so much on wars and military that we could have been like China. Same goes with welfare and illegals. The money spent on them. A worker permit system just for workers, no family, could have been used to get less expensive labor, but there would have to be some catch for medical care too.
I would try to make stuff in China too. Less hassles with government, employees and regulations. There needs to be a serious discussion on priorities in America.
“Trump has proven ability to repeatedly make the same mistakes, needlessly taunt allies, and violate his own treaties.”
Has there been a reasonable explanation of why the Senate is going along with all of this while a trade treaty that was previously voted on is wantonly abandoned? Are there enough senators that will follow along unquestioningly? Do too many need the chaos in order to fill their (campaign) coffers? Have the increasing number and scope of Executive Orders from previous administrations pushed things so far that now anything is possible?
That’s all short term thinking, and meant to prevent real long term solutions.
The uncertainty of markets and tariffs stabilizes once their in place.
To make the argument that tariffs are bad because they change market dynamics in the short term just means keep the status quo. No surprise there.
Tariffs protect Tormac, an innovation co, from competition from China and Germany and stealing their intellectual properties. The rich might invest Tormac which has the ability to raise prices and pay their 100 highly skilled workers. MBA bean counters destroyed industries for decades. Tormac employees own CEO Daniel Rogge is working on the bench. He tripled production and increased Chinese made goods by 20%. His landlord rolled back rent. He cut benefits and cost, reduced marketing budget by 25%, cut fat….Thanks to Trump
Our fiscal problems are demographic. We have too few young people and we spend all our money on the elderly. Unless someone is willing to deal with that, might as well keep kicking the can. Blowing up the economy will make our fiscal situation worse not better
It’s the old story of someone’s great grandparents who had 10 kids. Sadly, for whatever reason, they had no time for hobbies. 1000 cable channels nor space book.
Unless the CEO and all 100 employees in swing state, Wisconsin, voted Harris, I have zero sympathy. Trump was quite vocal about his intention to impose tariffs and we already know from his first term that Trump is unpredictable and sows chaos. Trump does not understand the internationalmarket economy and has surrounded himself with others who are also unqualified. Harris would have appointed a qualified Cabinet. Zero sympathy unless they all voted Harris.
Why stop there? Their spouses and voting-eligible children needed to have voted Harris too!
Harris being a splendid major-party candidate who couldn’t even place third in a party primary during the previous campaign cycle and wasn’t primaried this time around because…um…um…Biden was still an adequate candidate before last summer? (or whatever reason will be agreed upon by historians)
I get it that Trump is one of those “madmen in high office that hear voices in the air” (Keynes, 1936). But what I don’t get is why such a large number of people on this website, people who actually seem to be interested in sound economics, keep parroting his obvious tariff nonsense. It looks like some kind of tribal mass hysteria where people blindly follow the lead of a madman.
Thinking Jim Jones, drink the kool aid, smile as we die. Sadly that is how humans in large groups can behave.
a.k.a. “asses travel in masses”
It wasn’t Kool-Aid, it was Flavor Aid.
Eventually that phrase will pass out of the lexicon or, less likely, people will stop glibly referring to the demise of hundreds as they smugly disparage someone else’s behavior.
This story by the WSJ is propaganda. It’s small business survey is designed to be misleading. I can say this with confidence.
… And the frog in your pocket is in full agreement.
“Hello My Baby Hello My Honey, Hello my Ragtime Gallllll”…Croaaaaaak. (Apologies to Loonie Tunes)
So moved production from China to Mexico? Why not to US??
Probably because if he would have moved it back here, his products would need to be so expensive that he would not be able to sell enough of them to remain solvent..
It sucks but that is what happened to much of America’s manufacturing.
Starting with NAFTA, GATT and then allowing China ‘Most Favored Nation’ trade status decades ago.
With China’s behavior regarding Human Rights, that never should have happened.
They did not qualify for that status. And still don’t.
We can thank our elected political representatives for those results.
But hey, at least most of them have become very rich for selling us out (Newt Gingrich AKA Newt Gettinrich, et al).
And why would they “be so expensive”???
Because of the US regulatory regime and because US workers would have wanted more money for the same result. The workers might’ve wanted to unionize, too.
Yes, obviously. I’m aware of that. Just making a point, lol. Like THAT is the problem that needs to be solved. Which dems fight and cause more of, of course.
Taxes, welfare,minimum wage, unions, regulations, big government, expensive zero carbon energy, DEI hiring quotas, public education unions….
Yep. Obviously. Just making a point as to why things are so f’ed up here. Mish likes to blame Trump first and foremost, ignoring that other stuff
Because American workers suck. On this subject, I rely on the authority of Musk and Ramaswamy.
I will not disagree with the short term costs of tariffs. I will argue the manufacturing base in the US has fallen to the point where the US is vulnerable from a trade embargo by its suppliers. COVID was a lesson in supply chain shocks and vulnerabilities. When phrased as, “Would you rather pay tariffs now, or with your children’s life later?”, the answer should be a resounding, “more tariffs now”. It’s unfortunate people have stopped thinking. The designers of the US Constitution cautioned against “foreign entanglement”, and Trump is trying to heed that advice generations have ignored.
Tariffs never work. It’s just voodoo economics.
Tariffs worked for Japan, South Korea, Europe, China, India, Canada, UK.
You forgot North Korea, our new ally.
I have looked into this many times in response to comments here. Please list for me the tariffs that Canada applies to US imports.
Neither does the UK or Europe; but why let facts get in the way of a good rant?
chicken within quota $0.95/kg
chicken over quota 238% tariff
turkey within quota $0.95/kg
turkey over quota 158% tariff
footware 20% tariff
bakers wares >25% butterfat 246% tariff
ice cream 267.5% tariff
Those agreed poultry and dairy quotas account for a whopping 1% of US-Canada trade (I am rounding up).
Thanks for those. But those are not US specific. They apply to multiple countries. And they are pretty insignificant. Good try though.
I did find a few US specific tariffs on wild game and some odd types of fish. Also pretty insignificant.
Got anything of any significance?
There is free trade between Canada and US. There was a free trade agreement signed a few years ago.
Yes. Yet somehow the US still has a 14.5% tariff on Canadian softwood lumber. Perhaps Canada agreed to allow that in the USMCA?
It’s not just small businesses, the entire global economy can’t plan anything without knowing what the rules of the games are and Trump seems intent on changing the rules on a whim every five minutes. The best any business can do now is just limp along until he’s out of office or dems take Congress and start impeaching the clown right away.
This will be the world’s first self-induced recession when it starts and you’ll have Trump and the GOP to blame, it’s their fault 100%. People elected a pyromaniac and now are shocked he is pouring gasoline on everything and burning it down.
For enlightenment, please see my comment above..
This problem started decades back and is the responsibility of BOTH parties.
BOTH parties voted for NAFTA, GATT, etc.
BOTH parties have sold the working class out for their own personal gain.
Trump may not be dealing with it as well as he could but at least he is starting the process bringing manufacturing back to this country.
Except that process will fail and there is proof and a pattern that already exists. During Trump’s first term, he bragged about getting Foxconn to build a plant in Wisconsin that never happened. Whatever bragging he does now will fall flat as soon as he leaves office. Global firms aren’t dumb, it’s too expensive to hire American labor for manufacturing unless it’s robots and if it’s robots, why bother building them in the U.S?
https://www.jsonline.com/story/money/business/2023/11/10/what-happened-to-foxconn-in-wisconsin-a-timeline/71535498007/
What has Foxconn built since expanding to Wisconsin?Not what it originally promised. The facility has changed from a Generation 10.5 to a Generation 6, which normally makes screens for phones, tablets and TVs. But so far, no screens have been made.
Sure, but the solution isn’t deliberately crashing the economy.
You are not listening to Musk’s and Ramaswamy’s big insight: because of lack of education, the American manufacturing worker is not competitive anymore.
Nezz, manufacturing is not coming back to the US.
In order to manufacture you need a society which is literate in STEM subjects and US population does not like to study STEM
People elected a pyromaniac BECAUSE he’s a pyromaniac. They want him to burn things down.
Will some things inadvertently get burned? Yes, they will.
The losers are going to be people who are uncomfortable with change or not nimble enough to adjust quickly.
Oh the irony in your statement Tim, do you even get the irony you wrote?
The “free market” decided that they wanted lower cost of production so they moved manufacturing to Mexico then China. Those were the losers who were uncomfortable with change and weren’t nimble enough to change.
In come “central planner” and socio-communist Trump dictating how businesses should run (in the US) or else they will be taxed and tariffed to death.
The irony is palatable.
just spending that money! ICE awards $1B contract to private prison firm for major immigrant detention centerhttps://www.newsfromthestates.com/article/ice-awards-1b-contract-private-prison-firm-major-immigrant-detention-center
Finally! Some spending we can wholeheartedly endorse.
This is literally bringing jobs back to America!
I saw another report of a small Canadian company (300 employees) that makes wood-working tools. The owner said with the tariffs he will have to move the company to the US because 87% of their business comes from the US. He has already picked out either Ohio or Texas as the new site.
Wow a whole 300 jobs! First quarter projected to have negative growth already, all due to Trump.
https://www.cnbc.com/2025/02/28/the-first-quarter-is-on-track-for-negative-gdp-growth-atlanta-fed-indicator-says-.html
Early economic data for the first quarter of 2025 is pointing towards negative growth, according to a Federal Reserve Bank of Atlanta measure.
The central bank’s GDPNow tracker of incoming metrics is indicating that gross domestic product is on pace to shrink by 1.5% for the January-through-March period, according to an update posted Friday morning.
Mish gave an example of a small business and I gave another example of a small business from the Canadian side. I was using symmetrical examples in order to give it mathematical beauty or in the vernacular, like to like comparison. I am glad it wowed you.
During the last 2 years of FJB’s presidency, the BLS admitted that the sum total of new jobs that were created were taken by aliens.
They then revised the number of jobs created to be lower by almost 1,000,000.
The BLS was doing their level best to help FJB and his successor be reelected and they admitted as much.
Adding to that total mess, Biden’s admin hired about 200,000 new (unnecessary) Federal employees during that time period.
Which cost the taxpayer tens of billions of $$ each year.
I don’t like dems or repubs and I don’t really care for Trump either but the Trump Derangement Syndrome displayed by many 24/7/365 is not helping us to find our way out of this morass.
What would you do to solve these problems?
You can’t stop the Titanic from sinking after it hit multiple icebergs.
Iceberg #1 – demographic death spiral that can’t be fixed.
Iceberg #2 – $42 trillion in debt and growing.
Iceberg #3 – constant red vs blue infighting over trivial stupid nonsense.
Iceberg #4 – global banking system that is at its end of life.
I could go on, there are plenty more icebergs but those are the big ones. Like a Phoenix, the next stage is collapse and rebirth, the best thing to do is find a place on earth that will make you happy and live there until the rebirth. It will take decades.
Sure, but how many US jobs will be lost because Canada won’t buy as much US goods (either because they’re more expensive with reciprocal tariffs or because they’re reacting to Trump’s nationalism).
Zero-sum thinking, I guess?
I’m normally not a market timing kinda guy but the urge to sell equities and wait this out is pretty strong. I’d imagine a lot of other people are starting to feel the same way.
If I were a GOP senator, I’d be talking quietly with my colleagues about what triggers would be sufficient to impeach and remove him. IMO we already got there, but that’s just me.
Tomorrow feels threatening for the markets. We’ll be giving back Fridays gains. Removal will be un-necessary if the stock market, dollar or bond market puke for an extended correction.
It seems that most people only think about their portfolios.
If this country continues down the path it has been following, you won’t be very concerned about that aspect of your life, you will be concerned about societal changes that will resemble those that have occurred in third world countries as they unfold here.
And the increase in homelessness and crime we have watched over the last 4 years will be dwarfed by the societal changes we will suffer through.
Those people with ‘Normalcy Bias’ will be shocked by that new reality.
I’ll buy every single share you sell
What about my Trump meme coin?
Impeach? The country is fu@ked.
This corner we have been put into (by both parties) will not be resolved without PAIN.
We have been living on borrowed time for DECADES.
If we do not confront it NOW, when?
As a business owner and taxpayer, I have observed and have been an activist and advocate for fiscal responsibility in DC for decades as this problem has snowballed.
Most of the commenters here have never written to their congressmen, called their local or DC offices, pushed ballot initiatives or anything else that required any effort.
Perhaps the time for whining is over and the pain (spanking) must begin.
Let’s at least try something different because the status quo has failed over and over and over again.
Means test SS and Medicare and raise taxes a bit and you’re basically good. Or blow everything up because crashing the economy is sure to improve our fiscal situation…
Tariffs and the stock market tanking are not grounds for removal.
Besides you’d just get Vance and are you sure he’d be any different?