%125 Chinese Tariff ..... can we talk about it here ?

[BenIfin]

As long as its not political, can we post/talk about the impact of the U.S %125 Tariff on Chinese made goods ? given that price is a *massive* factor in peoples decisions about what gear / modelers to buy ?

 

[TheTrueZoltan!]

Here is the problem: I don‘t think it‘s possible to talk about the tariffs without getting political. The topic is political.

It‘s like trying to talk about rain without talking about the weather.

 

[2dor]

No tariffs on Chinese goods in the EU ...

 

[maguchi]

I guess I can't afford no more Chinese guitars or amps or pedals no more

 

[bigmenace]

My Temu order went from 1$ to 2$

/s

 

[Funk Soul Brother]

 

[Lorne Malvo]

As long as its not political, can we post/talk about the impact of the U.S %125 Tariff on Chinese made goods ?

You can certainly try.

But as soon as someone takes this thread across the line into political comment it will be nuked.

 

[BenIfin]

Here is the problem: I don‘t think it‘s possible to talk about the tariffs without getting political. The topic is political.

It‘s like trying to talk about rain without talking about weather.

I do see your point - but I think it can be done.

And for most people, price, for whatever reason it goes up or down, is a massive part of their choice criteria

At a %125 tariff, my view is that the impact on wholesale and therefore retail prices of any American made goods that are wholly or partially made in China, is going to be so huge, that some products will effectively become un-buyable and-or un-makeable - including some big name goods we all use and love in this forum. And thats not even looking at the possible impact on the 2nd hand prices of such goods that people already own.

As such, I think people will want to look or know about good / quality alternatives.

Maybe I'm in the minority though ?

For the record, I'm in Oz, not China or the US.

 

[laxu]

At a %125 tariff, my view is that the impact on wholesale and therefore retail prices of any American made goods that are wholly or partially made in China, is going to be so huge, that some products will effectively become un-buyable - including some big name goods we all use and love in this forum. And thats not even looking at the possible impact on the 2nd hand prices of such goods that people already own.

I'd say so too. But atm the situation can change any day because the idiots in charge are so volatile. China will absolutely not back down because doing so would mean losing face - and they know they can sit it out and improve trade with the rest of the world to reduce the blow to their own economy.

This is where I understand modelers are manufactured:

• Fractal. Assembled in the US.
• Strymon Iridium. Assembled in the US.
• Kemper. Germany.
• Quad Cortex. Assembled in Finland.
• IK Tonex. Assembled in Italy.
• Line6. Assembled in China or Vietnam?
• Boss. Assembled in Indonesia?
• UAFX. China?
• Hotone. China.

But pretty much all of these are likely to have either Chinese made PCBs or components. Analog Devices does make processors in the US so at least those can be excempt. I don't know how it works for e.g NDSP who gets basically a prebuilt board from China. In theory you could argue "well it's an American company chip" but you can't say "it's made in America".

 

[Eagle]

All or nearly all electronic components come from China and most of the raw materials to make them so that’s going to affect almost everything.

 

[Ed DeGenaro]

I guess I can't afford no more Chinese guitars or amps or pedals no more

Or American amps, seeing that most of the components are Chinese.

 

[Ed DeGenaro]

I'd say so too. But atm the situation can change any day because the idiots in charge are so volatile. China will absolutely not back down because doing so would mean losing face - and they know they can sit it out and improve trade with the rest of the world to reduce the blow to their own economy.

This is where I understand modelers are manufactured:

• Fractal. Assembled in the US.
• Strymon Iridium. Assembled in the US.
• Kemper. Germany.
• Quad Cortex. Assembled in Finland.
• Line6. Assembled in China or Vietnam?
• Boss. Assembled in Indonesia?
• UAFX. China?
• Hotone. China.
• IK Tonex. China.

But pretty much all of these are likely to have either Chinese made PCBs or components. Analog Devices does make processors in the US so at least those can be excempt. I don't know how it works for e.g NDSP who gets basically a prebuilt board from China. In theory you could argue "well it's an American company chip" but you can't say "it's made in America".

Your assembled isn’t gonna help much when the parts come from China or more likely the stuffed boards made of Chinese components come from there.

 

[maguchi]

Or American amps, seeing that most of the components are Chinese.

I can wait them out. I got a backlog of enough amps to last the rest of my life.

 

[Eagle]

USA imports are only 2% of China’s GDP so they can last out as long as it takes. They are also the largest owner of USA government bonds. They benefit directly from the increase in USA interest rates on bonds . They are laughing all the way to the bank.

 

[Eagle]

If you’re in the USA it will raise the cost of living considerably on everything . Many things indirectly plus the interest rates.

 

[BenIfin]

I don't believe the following is "political" but if it is, please delete it

To highlight the impact, the following is a simple basic $$$$ example of the impact on USA Makers whose goods are fully or partially made in China. Putting some "meat on the bone" for the sake of discussion.

So ...... putting my [lapsed] Economists hat on .... yes that is my Major .....

A - Baseline Tariff Levels from 3 weeks ago

USA Company X makes Product X
It currently sells Product X for $1500
Product X is %65 Made in Chinese and %35 made in the USA
The USA Landed Gross Wholesale Cost of Product X $800
That Landed Gross Wholesale Cost of Product X is made up as follows:- $520 being Chinese Cost and $280 being USA Cost
So Company X makes $700 on each item sold - being $1500 - $800 = $700
And that Profit margin is the basis for running / staffing / stocking / supporting / R&D'ing etc... the Company

B - %125 Tariff as of now

USA Company X makes Product X
It currently sells Product X for $1500
Product X is %65 Made in Chinese and %35 made in the USA
The USA Landed Gross Wholesale Cost of Product X is now $1450
That Landed Gross Wholesale Cost of Product X is made up as follows:- $1170 being Chinese Cost [due to %125 Tariff] and $280 being USA Cost
So Company X now makes $50 on each item sold - being $1500 - $1450 = $50
And that new Profit margin will become the new basis for running / staffing / stocking / supporting / R&D'ing etc... Company X going forward / at least as long as this level of Tariffs continues

In short, with this %65/%35 split example, Company X overnight loses %93 of its Gross Profit ie: $700 down to $50

This example is why I wrote that, in many cases, Company X type products will either become un-buyable and/or un-makeable.

It is impossible to overstate the impact on USA Companies that wholly or partially have their goods made in China.

Company X has several options open to it to adjust and "cope" with this change, but all of them are horrendously "very not good"

 

[maguchi]

 

[BenIfin]

.... and to further add to the problems .... %70 of all America's Rare Earth Materials come from China.

Of that %70, the top 7 are absolutely critical and vital to related production in the USA.

As of yesterday, China announced it was going to decide to either (a) totally block there exporting to the USA or (b) massively reduce the numbers available for export to the USA

 

[laxu]

Your assembled isn’t gonna help much when the parts come from China or more likely the stuffed boards made of Chinese components come from there.

Yes I pretty much say that in the last paragraph of my post.

E.g Fractal could probably move to US made PCBs, Analog Devices chips and chassis if they aren't using these already. But there's still a lot of Chinese made components that would be tariffed, increasing their materials bill significantly.

 

[maguchi]

If this crosses the line into politics, I apologize and will remove it.

Interest rates on most bonds are typically fixed at the time of purchase. So any increase in bond rates will only apply to new issues of bonds.

Here's a breakdown of who owns US debt:
Domestic Holders:
Federal Reserve System: The Federal Reserve is a major holder of US debt, holding a significant portion, particularly after rounds of quantitative easing.
Social Security and other U.S. agencies: These agencies hold a substantial amount of US debt.
Domestic private investors: This includes individuals, private banks, and other institutions.
State and local governments: They also lend money to the federal government, holding a portion of the debt.
Foreign Holders: Foreign Holders:
Japan: Japan is the largest foreign holder of US debt, with holdings exceeding $1 trillion.
China: China is another major foreign holder, holding a significant amount of US debt.
United Kingdom: The UK also holds a substantial amount of US debt.
Other countries: Other countries, including Luxembourg, Canada, and Switzerland, also hold US debt.