The Trump administration is apparently looking to ease export restrictions on firearms. As a result, stocks in gun companies surged as people began trying to profit off of the administration’s decision.
Four senior U.S. officials told Reuters the rule change would shift oversight of commercial arms sales from the State Department to the Commerce Department — giving American manufacturers more leeway to sell guns internationally, creating more jobs stateside and adhering to the president’s “Buy American” policy platform.
“Commerce wants more exports to help reduce the trade deficit. Amd State wants to stop things because it sees (arms) proliferation as inherently bad,” one of the officials, who spoke on a condition of anonymity, told Reuters. “We want to make a decision that prioritizes what’s more important. This will allow us to get in the (small arms sales) game for the first time ever.”
Sturm, Ruger and Co. and American Outdoor Brands — Smith & Wesson’s holding company — closed with double digit increases Tuesday. Vista Outdoor stock likewise gained more than 3 percent. The sudden boost follows a “difficult” summer for gun makers and retailers still standing in the shadow of last year’s record-breaking sales. Since the November election, stocks for Smith & Wesson and Ruger fell 50 percent and 26 percent, respectively. Both companies blame weak demand, with Smith & Wesson’s CEO predicting as much as a 17 percent decline in annual profits through 2018. Ruger’s second quarter net sales dropped 22 percent and its quarterly earnings fell by almost half compared to 2016.
The prospect of eased restrictions, however, could cure the industry’s malaise. Lawrence Keane, senior vice president for the National Shooting Sports Foundation, told Reuters the rule change would boost annual sales by as much as 20 percent.
So why does this matter?
The answer is pretty simple. Removing export restrictions gives American gun manufacturers new markets, markets they haven’t had over the last few years. Those new markets may go a long way in increasing profits for those companies.
Increase profits mean a greater likelihood they can weather the storm that comes from no one looking to ban guns for the next few years. Yes, I know, for a site that likes the right to bear arms, it seems odd to refer to that as a storm, but remember that the constant threat on the Second Amendment from the Obama Administration spurred a lot of people into buying guns. With Congress being controlled by our ostensible allies–some better than others, obviously–there’s little risk of that.
With that lack of risk comes the lack of any imperative to purchase a firearm right now. That means many gun manufacturers are feeling some serious heat.
By allowing exports, these manufacturers can take their products and offer them to broader markets. In particular, markets that are looking to buy right now regardless of any potential risks to the Second Amendment.
With that, gun companies aren’t nearly as likely to collapse due to reduced sales. After all, the Second Amendment is great, but without guns to buy, it’s just a few words on an old parchment for all the good it will do. How can you keep and bear arms if you can’t actually buy any arms?