This American Knife Maker Backed Trump. Now, His Tariffs Are Cutting Into Profits

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Why “Just Buy American” Isn’t Always an Option A Cautionary Tale for Pro-Tariff Businesses?

A national tariff strategy is sound in theory. The government imposes hefty taxes on imports; foreign goods become more expensive; and thus consumers and businesses are nudged toward “buying American.”

In practice, however, President Donald Trump’s tariff policy has affected businesses that thought they’d dodge the impact, including the Montana Knife Company, according to GearJunkie.

Founded by Josh Smith in his garage during the pandemic, the company grew rapidly by selling high-quality, U.S.-made knives. But despite Smith’s vocal support for Trump in the 2024 election, his business is now feeling the financial sting of recently-enacted trade policies — more specifically, steep tariffs on imported steel. The conundrum highlights the reliance of even “U.S.-made” goods on the global supply chain.

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Smith, for his part, says he still isn’t opposed to tariffs in principle — he just wants them applied strategically. “Punish the guy making the knives in Taiwan and in China. I’m fine with that,” Smith said on his “The Josh Smith Show” podcast. “But I’m the guy making knives in America, Donald Trump. Don’t punish me for making knives in America by tariffing my equipment and my steel supply.”

Why “Just Buy American” Isn’t Always an Option

His frustration stems from a critical supply chain issue, reports GearJunkie. The last major U.S. producer of high-end knife steel, Crucible Industries, filed for bankruptcy protection in December and was later acquired by French steel company Erasteel. So in lieu of a domestic alternative, MKC has no choice but to import steel at its now 50% premium.

The topic of Smith’s woes made its way to Threads after being posted by popular men’s fashion writer Derek Guy, who highlighted the contradiction of Smith’s situation. “On April 30th, Josh Smith of Montana Knife Company said you won’t have to worry about tariffs if you buy American. Last week, he realized his costs are going up because he imports equipment and steel. And so do his suppliers. His costs may increase up to $600k because of tariffs,” Guy posted.

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Guy added: “IMO many people aren’t aware of how much they import. Genuinely not posting this to gloat, but hoping that people reevaluate how much of their life is connected to an international supply chain. Many small businesses, including artisans, will see their businesses shutter because of these tariffs, regardless of how they voted.”

The post sparked a spirited discussion, including commentary from one supply chain expert with a sobering reality check. “Hi. Global Supply Chain Manager here. I source copper, steel, plastic resin, and a few other commodities from US and Asia… US-made steel is really hard to get. There isn’t enough ore to have a pure domestic source. Suppliers are having to mix sources to meet demand… If it isn’t US, there is a tariff for whatever country is on that cert, even if it comes from a US mill. Additionally, US steel houses are increasing prices… because they can,” he wrote.

The supply chain manager added that ultra-high foreign tariffs have also allowed U.S. steel producers to raise prices by 10% to 50% on spot steel — or steel purchased at market prices for immediate delivery versus via a long-term contract — further squeezing businesses that rely on these materials.

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A Cautionary Tale for Pro-Tariff Businesses?

Smith’s story highlights a broader economic tension. Tariffs designed to protect U.S. industry can also undermine them. For investors and small-business owners, Smith’s experience is also a bleak reminder that political preferences don’t always align with your personal finance reality. That’s especially true when it comes to trade policy, as even those framed as pro-U.S. can have unintended consequences, especially for businesses in niche markets with a dearth of domestic sourcing options.

Or in other words, economic nationalism is a double-edged blade. And right now, it’s cutting into the bottom line of many U.S. manufacturers.

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Image: Shutterstock

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