It’s the time of year for saving money!
If I had a dollar for every time someone has commented that my publisher, Jerry Del Colliano, was “too political.” I’d have enough to afford whatever price increases are about to come down the pike from many high-performance audio manufacturers.
Some of the duller among you may be thinking, “If manufacturers just used USA-made parts they wouldn’t have to raise prices.” The phrase, “You know nothing,” comes to mind.
If US manufacturers could make a high-performance audio component without using anything made in China, many would, but many can’t. And manufacturers that do use Chinese parts don’t have many good options. If they can’t find direct plug-in replacement parts (without a complete component redesign), or they work from raw materials (like aluminum) there are simply no better US-made (or non-Chinese) alternatives. They will be paying additional tariffs for their parts, and more than likely YOU will be paying more for their wares.
Will the increases be only 25%? In some cases they may be even more! If you happen to be a Chinese audiophile who wants a US-made component you can kiss your wallet goodbye. According to EveAnna Manley head of Manley Labs, “For those who haven’t been following along in detail: So now my products are 25% more expensive in China because they have matched USA tariffs. Tit for tat.” So, US manufacturers get a double-wammy of paying more for parts and then having their prices upped 25% in one of the largest markets in the world.
Depending on what percentage of parts, and how expensive those parts are, the increases in the cost of a particular component could well exceed 25%. Jim McCullough from Mathew James, the manufacturers of Cello told me, “I just finished a conversation with our Chinese distributor. Due to the increase in costs for aluminum that went into effect last year, our Cello Chorale preamp, which weighs 68 lbs., due primarily to the aluminum we use for the chassis and the tariffs about to go into effect we will be forced to raise the actual sales price for the Chorale from $28,000US to $44,000US without an additional single dollar going to us.”
Now, if the MSRP on something that you already own goes up 25% you just “made” money, right? So why not consider this an example of the proverbial “It’s an ill wind that blows no one any good.” You’ve made out, right? Your gear is all “worth more” now…
Err, no. Just like in a rising residential real estate market, just because your current value or sales shows an increase doesn’t mean you “made” any money if it has to be sunk into your next home. Only the tax collector and the real estate agents actually made more money on the deal, just as the tax collector does on tariffs. But I digress.
Whether you’re a democrat, republican, conservative or liberal, these new tariffs are going to cost you.
As to whether they are justified, and whether they could be effective, that’s for far more political pages than this one…but one thing is crystal clear, your expensive hobby just got even more expensive…
I have talked with lots of manufacturers about this, and most are just looking to move production to Vietnam or the Philippines.
Fine, but here’s a manufacturer’s take on it from Andrew Jones of ELAC – “It’s been suggested that “why don’t you just move your production away from China?” The answer is that the USA has no longer the infrastructure to support low cost manufacturing. “Well move to to another country then”…Well you don’t just move” production. The parts will be differently sourced, so your newly manufactured speakers will not sound the same. And if you had signicant tooling for the manufacturing, then unless you own outright the tools you are going to have to pay to re-tool your entire product line. That’s a dramatic effort. So instead of taking your time to design your next product introduction, you’re having to redesign every single product you offer. That takes a lot of time effort and money. Meanwhile customers have decided to play a waiting game. They don’t want to pay extra due to tariffs, they’ll just wait until the tariffs go away. So now you have no income, huge expenditure to re-manufacture, and no extra revenue once in production compared to the revenue you had originally, but now you have the significant debt to to the costs of moving production……and if you think “ok, I’ll buy Canadian, or European “, if those products contain parts made in China then those products are possibly be subjected to some form of tariff.
In what scenario is any of this a good idea???
None. It’s a hackneyed attempt to recreate a bygone era, by people who have made no effort to understand the businesses they’re affecting.
A big red flag to me is not owning your own tooling in the first place. That is unfortunately common in many industries, mainly because it eliminates an up-front cost. However, that also means moving is hard (as Andrew says) and it also completely opens you up to being cloned/copied (after all, you don’t own the tool, if someone else wants to use that tool, it’s your factory’s call – not yours).
ALWAYS own your tools. Otherwise you’re like the person who pays to remodel their apartment – it’s great until your landlord (tool owner) decides they want to raise the price, or move you out…
The same scenario where we see unfair trade agreements, which have, a good part, resulted to the hollowing of our cities. Been to Newark, Detroit, St. Louis, Oakland, or Birmingham lately? These are your ideas of good ones????????
The scenario where we start making some short-term sacrifices in order to bring manufacturing back to the U.S. is where this is an outstanding idea. If your company sold out to China then, well, that decision is finally coming back to bite you in the ass. Sorry.
The Tariff Scare made me buy a subwoofer and two power amps last month, all made in China. No more ELAC B6 at $75.00 each on Black Friday!
Shame on you.
Nope, he’s the smart one in this duet…
Recently returned from Taiwan. Since Taiwan enjoys normal and relaxed tariffs from the USA, some confided to me that they’re looking forward to the bump in business. A good number of Chinese manufacturers have capacity in Taiwan. Eventually manufacturers will adjust to the next best thing. Either way 25% tariffs are painful. Instead of upgrading I should probably just enjoy the wonderful audio equipment I have.
“Instead of upgrading I should probably just enjoy the equipment that I have.” That is probably the single best sentence I have ever read on this site.
Trump who says the US (the richest, most powerful nation on earth) has been treated unfairly for 40 years….he says trade wars are “easy to win”…historically Republican Herbert Hoover said the same thing when he signed the Smoot Hawley Trade Tariff bill that started the Great Depression…Hoover was the same guy that thought Prohibition was a Great Idea…..Trump is the re-incarnation of Herbert Hoover…ask yourself…when is the last time Führer Trump was right about anything….???
Your readers tell you that you’re being too political, so you respond with arguably your most political article to date? Newsflash: not every audiophile is a bleeding-heart liberal. God forbid (I’m an atheist btw) American electronics companies be forced to innovate in order to survive.
And heaven forbid American electronics companies be forced to make high-quality products here in the U.S. in order to compete.
Some are Trumpster like you.
Dullard or not, I’f you can spend $28,000 on a preamp, you probably aren’t going to be concerned about tariffs.