Tariff implications.........

Mikado463 said:
Brian, while that sounds all well and good, I for one don't see that ever happening. At least not in my lifetime.........
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I am 63 and love watching the current history unfold in front of me. I have a few years to see how it all pans out but we are already on our way.
 
I suppose the industry is in flux and has not figured out what to do yet. Remember, each step in the distribution process once a product reaches a country is subject to % markups by distributors, retailers, etc. If each one adds their standard % on top of the increased tariff that makes everything worse. I like Mike's idea of only passing on the actual tariff.

I just purchased a new recumbent trike. I will be watching to see any price increases as a gauge to the affect of tariffs. It was assembled in Michigan but I am sure almost every part was imported. The only part I am not sure of is the mesh seat. There is no bicycle parts or bicycle tire manufacturing in the USA. A universal tariff is only a revenue source and won't bring bicycle manufacturing back to the USA.

I just read an interesting article by the head of a clothing manufacturing company that makes everything in the USA. Very rare indeed. The woman at the head of the company said there was no domestic source for some of the thread she needed. She further stated that insecurity would prevent any rational company from committing to building manufacturing in the USA only to see tariffs disappear or be drastically reduced. There is no stability now so expensive, long-term decisions cannot be made.
 
Until things stabilize, I think the adding a “plus tariff“ line item to current prices is the way to go. That’s what many companies did when gas had spikes over the years. It’s not a new concept. Although it is new for many industries.

Right now negotiations on tariffs have just started after many many years of ignoring the issue. It might take a year or so.
 
Shadowfax said:
It is high time that we start making everything we need in the US in the US. That will be the elimination of Tariff concerns.
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Where do you hire all the staff needed to make everything in the US? And if you have them, what salary do they receive and what will be the selling price of the goods they produce?
 
NewAlkyogre said:
Where do you hire all the staff needed to make everything in the US? And if you have them, what salary do they receive and what will be the selling price of the goods they produce?
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Unfortunately I cannot voice my theories here because it will be labeled Political. What I think I am hearing is Americans don't want to work and some people support slave/wage manufacturing to keep their costs down. And from what I am seeing, there are many recently laid off people that need jobs. I guess the choices right now are pick vegetables or someplace within all the new MFG jobs becoming available.
 

the professor said:
Until things stabilize, I think the adding a “plus tariff“ line item to current prices is the way to go. That’s what many companies did when gas had spikes over the years. It’s not a new concept. Although it is new for many industries.

Right now negotiations on tariffs have just started after many many years of ignoring the issue. It might take a year or so.
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As you can imagine, I’ve been asked by numerous other Distributors what I was going to do. I even chatted with the owner of Lumin and he loved my idea (but they already raised MSRP). The Raidho fellow also liked it and several others.

Can manufacturing return to the US? Well, I just bought some new jeans 100% made in the USA (Dearborn Denim), so I guess we can and still do make things here. People a lot smarter than me will decide what’s best regarding tariffs. My job is to simply analyze the situation and make the best decision for my customers and brands.
 
Mike said:
<snip>

Can manufacturing return to the US? <snip>
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If not return, start.

Highly specialized parts or certain materials can be made elsewhere, but shipping that specific part in and paying a tariff only on that would certainly be cheaper than paying a tariff on the entire unit. I realize that not everything can be made in the US, due to restrictions/regulations for whatever reason. That said, most parts can. The manufacturing aspect can most certainly be done here.

Tom
 
As the clothing manufacturer I mentioned in my previous post stated, most Americans are used to and want $25 jeans. Dearborn Denim jeans are $75.

When we outsourced heavy manufacturing we also outsourced all the pollution that it generates. I started my environmental career at the beginning of new regulations for air and water pollution and then later hazardous waste. I pulled up bottom samples from the Cuyahoga River in Cleveland that made me want to vomit. The smell was so bad from phenol and other chemicals. Back in the lab I could not find any macroscopic organisms. Not even the mostly indestructible sludge worms. Now the Cuyahoga Valley has a national park. Although the park is far upstream from the shipping channel I spent many hours cruising on a jon boat.
 
Dizzie said:
As the clothing manufacturer I mentioned in my previous post stated, most Americans are used to and want $25 jeans. Dearborn Denim jeans are $75.

When we outsourced heavy manufacturing we also outsourced all the pollution that it generates. I started my environmental career at the beginning of new regulations for air and water pollution and then later hazardous waste. I pulled up bottom samples from the Cuyahoga River in Cleveland that made me want to vomit. The smell was so bad from phenol and other chemicals. Back in the lab I could not find any macroscopic organisms. Not even the mostly indestructible sludge worms. Now the Cuyahoga Valley has a national park. Although the park is far upstream from the shipping channel I spent many hours cruising on a jon boat.
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I don't know where you buy your jeans but my Levi's and Lee's cost $50 to $70 unless I can catch them on sale.
 
Mechnutt said:
I don't know where you buy your jeans but my Levi's and Lee's cost $50 to $70 unless I can catch them on sale.
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I have not purchased new jeans in many years. When I did they were JCPenneys' Arizona and St. John's Bay brands. Now their Arizona brand men's jeans are on sale $28-$32.
 
Dizzie said:
I have not purchased new jeans in many years. When I did they were JCPenneys' Arizona and St. John's Bay brands. Now their Arizona brand men's jeans are on sale $28-$32.
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Arizona Brand men's jeans are manufactured by The Original Arizona Jean Company, which is a private label of JCPenney. While the brand's history includes manufacturing in the USA, like the example on eBay, current production is primarily sourced from overseas to meet global demand and manage costs
 
I worked for a consumer electronics company and our strategy was contrarian. We built in the continent the gear was sold. By the time I left there was so little labor in the product that it really didn’t matter where you built it.

Many manufacturers have been chasing cheap labor across the globe to keep prices low. China too expensive? Go to Myanmar. Or Vietnam And so it goes.

Would US citizens accept working in a company compound with onsite housing in dorms? PM 2.5 over 300 ppm? This is what global cheap labor looks like.
 
One thing that many people forget, or do not fit into their calculations is the actual price of parts. Companies that build their products in the US do buy parts from over seas.

My friend EJ owns Wyred 4 Sound. His gear is all built in his facilities in California. He also even owns machines that populate and place parts on circuit boards in house. However, the raw circuit boards and even the rolls of various transistors, etc., come from over seas (much from China). Therefore, simply being made in the US does not insulate a manufacture from affects of tariffs. I guarantee the costs of the circuit boards and the small parts will in fact affect over all price of products manufactured here. Since these type of small electronic parts can not be sourced in the US the prices of even US made gear will probably rise.

It would be amazing when politicians start throwing terms and concepts around that they actually understand the full implications of what they say and the actions they take.
 
mep said:
It would be amazing if people stopped hitting the panic button and just let this process play out.
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On the short term: what is going to happen in the process is inflation, so almost everything will be more expensive, audio included.

On the long term: You are right: lets see how this experimental process play out.
 
mep said:
It would be amazing if people stopped hitting the panic button and just let this process play out.
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I agree. The net effect is going to come from losses and wins. Those will be determined one company at a time, one supply chain at a time and in total tell us the score.

No doubt it’s scary, first, because it’s a big (HUUGE?) change but also a very complicated change. Hundreds if not thousands of changes at once.

Nobody seems able to handicap it yet. But no doubt many economists and MBAs are modeling things 24 hours a day trying to ‘see’ the future. As country to country negotiations occur, the playing field is going to change so good luck to those trying.
 
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