An idiom expressing the circularity of tool making

The relevant idiom here is...

Pull yourself up by your [own] bootstraps

...where you might find that Huffington Post article interesting. I haven't read it all, so I don't know whether it explicitly points out that this idiomatic usage has been modified / transferred to the IT world - when your computer boots up, that's just a shorter way of saying it's bootstrapping [itself, the Operating System].

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I only discovered after writing the above that the increasingly popular GRUB boot loader package is an initialism standing for GRand Unified Bootloader. I suspect metaphoric booting up may extend even further in future, as we get used to the idea that even things like TVs take time to "turn on" these days (because they're basically "computers").

Maybe this is what you're looking for.

Is there an idiom or a proverb like "in order to make a knife you need to use another knife"

"You need a knife if you want to make a knife - It's turtles all the way down"

https://en.wikipedia.org/wiki/Turtles_all_the_way_down

"Turtles all the way down" is an expression of the problem of infinite regress. The saying alludes to the mythological idea of a World Turtle that supports the flat earth on its back. It suggests that this turtle rests on the back of an even larger turtle, which itself is part of a column of increasingly large world turtles that continues indefinitely (i.e., "turtles all the way down").