What will the impact of prospective -- and possibly impending -- U.S. tariffs be on audio gear?

[a4eaudio]

The USA is still the second largest manufacturing nation in the world so they must still be making something there.

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The US's GDP is the largest in the world (by quite a bit) so being the 2nd largest in total manufacturing doesn't mean much. Manufacturing is not a large % of US GDP and hasn't been for 70 years - we are predominantly a service economy. Our comparative advantages are in banking, consulting, R&D, higher education, etc. The US outsourced textile and apparel production decades ago - the US designs Nvidia chips for AI and designs/builds rockets with SpaceX while Vietnam makes Nike and Reebok shoes. Overall this is good - unless you worked in the shoe plants.

 

[a4eaudio]

Will I (a U.S. customer) bear the cost of the tariffs?

 

[JeffS7444]

USA is a powerhouse in big infrastructure works, energy, agriculture, intellectual property, higher education, finance, business management and cultural exports. Consumer electronics, not so much: Factory work can be boring, and most Americans shun it unless it's in the sort of industry known for good pay and benefits. Even in the 1980s when I was working in an electronics assembly factory, most of the staff were immigrants.

Meanwhile, China really wants their factories to keep churning out goods for export, because domestic consumption is sucking pretty badly right now, and demographic projections are causing a major freak out.

 

[ta240]

The other team has cheap labor and wants to protect manufacturing. We don't have cheap labor and never will. Trying to protect that makes no sense. We need to advance what we do which is great (high technology, complex technology, medical, etc.).

And yet we can nearly compete on some things even with the lopsided playing field, I've seen multiple times on here people commenting on why would they buy a JDSLabs DAC (not completely made in the US) or a Schiit Audio one over one of the slightly cheaper options direct from China.

The things that we do well that you mention are the other problem, in order to be able to sell the things you list in their country without large tariffs our companies are required to partner with local companies, often owned at least partially by their government, and they also have to share that precious high tech information.

Part of the bargaining should include those barriers and tariffs. There is no version of reality where large portions of manufacturing move back to the US but we shouldn't give up everything else just to keep getting tons of cheap stuff.

 

[A Surfer]

I guess the question for me, what do those people who clearly wish to return to bygone days and favour protectionism really want/expect?

I also wonder if those who want things improved quickly are being realistic. Even if the industrial capacity is to return, assuming that it can, how quickly is that likely to happen? New factories have to be built, people have to be trained. The demise of domestic manufacturing took decades did it not?

 

[ta240]

The US outsourced textile and apparel production decades ago - the US designs Nvidia chips for AI and designs/builds rockets with SpaceX while Vietnam makes Nike and Reebok shoes. Overall this is good - unless you worked in the shoe plants.

That does make sense.

The problem with the shift in the global marketplace for consumers is those smaller items are now delivered directly to the customer with few, if any, people outside of the manufacturing country having any business to do with it. Nike and Reebok employee people here in higher level jobs handling the design and the behind the scenes work. As the market shifts to products "designed", produced and sold in China but delivered directly to customers in the US, those higher end jobs go away. The tariffs that China uses to force our companies to share their technology work quickly to transfer more than just production there.

 

[amirm]

Which goes to the other problem I mentioned, in order to be able to sell the things you list in their country without large tariffs our companies are required to partner with local companies, often owned at least partially by their government, and they also have to share that precious high tech information.

If you want access to their market, they do demand that, implicitly or explicitly. It is the nature of their government being far more powerful than their industry. That said, we don't seem to be afraid doing the same seeing how we have come close to banning TikTok.

 

[amirm]

I guess the question for me, what do those people who clearly wish to return to bygone days and favour protectionism really want/expect?

They want to feel good about things they are not going to get. I am reminded of the last time we did this how it hit our grain industry hard as their exports crashed in retaliation to our tariffs. An industry that we subsidize and had to subsidize even more during that time.

 

[ta240]

The hope was that they would always stay subservient to our advanced society and technology.

That is a big claim. A large part of the hope was they would discover capitalism and change their entire outlook. Instead they used the income to fund their old system.

 

[ta240]

If you want access to their market, they do demand that, implicitly or explicitly. It is the nature of their government being far more powerful than their industry. That said, we don't seem to be afraid doing the same seeing how we have come close to banning TikTok.

So, if they can make demands if we want access to their market then why is it suddenly wrong for us to make demands if they want access to our market?

I haven't followed the TikTok thing that much, but are we demanding that they partner with a US company and share the information on the design and function of their algorithms?

 

[A Surfer]

That is a big claim. A large part of the hope was they would discover capitalism and change their entire outlook. Instead they used the income to fund their old system.

It is a system that has actually evolved quite a bit. They absolutely did discover capitalism. There is plenty of economic disparity there, and here. In many ways this is a distinction without a difference.

Pretty sure that many people in our economic system feel oppressed and powerless. Ultimately capitalism concentrates power. Choose your poison in some respects?

 

[ta240]

I guess the question for me, what do those people who clearly wish to return to bygone days and favour protectionism really want/expect?

I also wonder if those who want things improved quickly are being realistic. Even if the industrial capacity is to return, assuming that it can, how quickly is that likely to happen? New factories have to be built, people have to be trained. The demise of domestic manufacturing took decades did it not?

I just want a level playing field. China uses protectionism to limit our companies access and so we should do similar.

The 'quickly' thing goes back to the hundred year plan. Our instant gratification society will scream the instant their DAC goes from $100 to $120; meanwhile their government oversight will sit back and go "a few years of lower sales is fine because for decades we will get the rewards".
They are playing 3 level chess and we are going "look at the horsey!!!"

 

[ta240]

It is a system that has actually evolved quite a bit. They absolutely did discover capitalism. There is plenty of economic disparity there, and here. In many ways this is a distinction without a difference.

The connected discovered real capitalism, the rest just fund the communist system. Sure, there are parallels in regular capitalist systems, but if I try to differentiate anymore than that my post will get removed.

 

[A Surfer]

I just want a level playing field. China uses protectionism to limit our companies access and so we should do similar.

The 'quickly' thing goes back to the hundred year plan. Our instant gratification society will scream the instant their DAC goes from $100 to $120; meanwhile their government oversight will sit back and go "a few years of lower sales is fine because for decades we will get the rewards".
They are playing 3 level chess and we are going "look at the horsey!!!"

We'll try not to go too far down the rabbit hole, but the US and other developed nations use plenty of subsidies across many industries. Some of the schemes are just diffused, but the economic advantage they afford domestic production is nonetheless still real.

 

[phoenixdogfan]

The other team has cheap labor and wants to protect manufacturing. We don't have cheap labor and never will. Trying to protect that makes no sense. We need to advance what we do which is great (high technology, complex technology, medical, etc.).

Trying to protect something that economics preclude from ever being viable again is a fools errand. The US is a service economy, better to let the cheaper goods that we will never be able to manufacture as well anyway flow freely and make our money marketing the things we do uniquely well.

 

[EERecordist]

Tariffs are organized with international codes, the HTS, for each export and import. I looked into it a few years ago to understand import tariffs on building materials.

To impose tariffs, the US government, or any government, would set a percentage on specific HTS codes, or all the codes from a specific country.

The imported price is also dependent on fluctuating exchange rates which countries control, usually to advantage their exports.

The exporting country, seeing their exports reduced by rising end customer prices in the importing country, imposes retaliatory tariffs. Then maybe negotiations proceed. The supply chain digests the price inflation.

So in the big picture, you can look at any country's trading partners, imports and exports, by large segment goods classification to forecast the impact on an individual.

I have looked at microphones from Thomann, and I think the tariff on that HTS kicks in above $800 today.

One area the US subsidizes imports is low rates for last mile deliveries by the US Postal Service. That makes possible companies like Temu, all the AliExpress, and so forth. So all of my Chinese DACS, amplifiers, and test equipment is delivered without tariff, as far as I can tell, for a very small price. Amazon uses the US Postal Service for rural areas where they are too cheap to send Amazon vans and freelancers. Shippers can find alternatives tp the US Postal Service if the price is too high.

In my view, our individual expenditures on Chi-audio is tiny in comparison to our individual consumption of the spectrum of Chinese imports - https://www.bis.doc.gov/index.php/c...istical-analysis-of-u-s-trade-with-china/file.

I'll tell an interesting story. A friend of mine was a product manager for HP printers. To make printers, you need screws, imported from China. To make screws yourself, you need screw-making machines. They are not made in the US, they are made in China. I was talking to a company that makes bicycle parts. Bearings supply is dominated by China. A friend of mine did a startup with a predecessor to the iPod, the microcontroller consumer product design knowledge is in China, not here.

Right now, I'm looking at solar panels and home batteries, pre-tariff.

 

[AudioJester]

In these kind of "Trade wars" we in Australia are largely bystanders. We did get an exemption with the last round of tarrifs, and cheap Chinese goods became even cheaper.

One of the big recent trade factors has been Chinese dumping of electric vehicles in world markets - heavily government supported/subsidised manufacturing in China. In Aus, with no local automotive manufacturer we have benefited with cheaper cars. Even our Chinese built Teslas are much cheaper.

 

[a4eaudio]

...The 'quickly' thing goes back to the hundred year plan. ...
They are playing 3 level chess and we are going "look at the horsey!!!"

Real GDP per capita in the US is $73,000 (ranked 14th) while China's is $22,000 (ranked 97th). They might need a 300 year plan.

 

[Chrispy]

Chinese cannot afford to absorb tariffs.
All theoretical is good but think of it backwards.They ask people to declare false values about items send there for repair exactly because they have tariffs too.
Now think of the nightmare that an item has to pay tariffs 2 more times if repaired,once going in China and once more going in US again.

And considering how many stuff gets lost in the way false declared value and insurance may not be the best idea.

You've sent items to China for repair? Importing even Chinese origin goods when I was in the business needed special permission to enter the country...maybe that's changed as I've been retired for a while now..... US tariffs on foreign made goods after repair is only on the value of the repair, but has to be properly documented to qualify.

 

[Chrispy]

Tariffs motivate manufactures to go thru a alternative country thru a private enterprise broker.
Instead of paying the 20% tariff they pay 18% and the private enterprise broker keeps it all.
Perfected corruption.

Will you pay more for your next electronic?

How does this work?