Two major U.S. ammunition manufacturers have filed for bankruptcy amid soaring costs and collapsing demand, signaling deeper trouble in a fragile firearms industry.
At a Glance
- Specialty Cartridge Inc. (Atlanta Arms) and Watchtower Firearms filed Chapter 11 in 2025
- Inflation, high interest rates, and weak demand have devastated sales
- Biden administration imposed a 35% import tariff on key primer materials
- Gen X, a Bosnian supplier, is ceasing exports due to tariff pressures
- Experts warn of rising prices and potential supply shortages for consumers
Industry Under Fire
The U.S. ammunition industry is being squeezed from all sides. In a troubling sign of the times, Specialty Cartridge Inc. and Watchtower Firearms have both declared bankruptcy, citing unsustainable production costs and collapsing consumer demand.
Atlanta Arms, a key small-caliber supplier, blamed inflation and rising material prices for its financial unraveling. Watchtower, known for its tactical “Raider Series” rifles and “Demolitia” handguns, pointed to overwhelming vendor debt and tax burdens. “Everything’s more expensive to make, and nobody’s buying it,” said Mark from the YouTube channel God Family and Guns.
Tariffs and Turmoil
Exacerbating the economic pressure is a new 35% import tariff on foreign primers, a critical component in ammunition manufacturing. This Biden-era policy has forced Bosnia-based Gen X, a major primer exporter, to halt shipments to the U.S., further disrupting supply chains.
American ammo companies, which rely heavily on imported brass, powder, and primers, now face escalating input costs with limited access to alternatives. High interest rates have also dampened consumer firearm and ammo purchases, compounding liquidity issues across the sector.
According to analysts, the ammunition market is enduring a “perfect storm” where regulatory, economic, and logistical forces are converging with devastating impact.
Economic Fallout and What’s Next
While legacy manufacturers like Remington and Colt have survived previous bankruptcies, younger brands like Watchtower may not recover. These failures expose a systemic vulnerability in the U.S. arms supply chain, heavily dependent on domestic consumer demand.
“Most of the civilian small arms ammo in the world is bought by us – by Americans,” noted Mark. “We’re the only ones buying it. If we’re not buying it, they’re going out of business.”
As bankruptcy courts assess the future of these firms, industry leaders are reevaluating pricing models, sourcing strategies, and policy advocacy. If current pressures persist, more closures could follow—leading to fewer options and steeper prices for American consumers.
