What will a tariff war do to instrument prices ?

[edstraker123]

We will all have seen Trump is implementing increased tariffs against a number of countries who will no doubt reciprocate. Obviously not discussing the political side of this, but just wondering how increased instrument prices will impact retailers or suppliers and how will they cope in an already difficult market ?

Edited February 3 by edstraker123

[snorkie635]

8 minutes ago, edstraker123 said:

We will all have seen Trump is implementing increased tariffs against a number of countries who will no doubt reciprocate. Obviously not discussing the political side of this, but just wondering how increased instrument prices will impact retailers or suppliers and how will they cope in an already difficult market ?

Any American Fender will be worth £10,000 and Wals will be worth £1,200. 😉

[warwickhunt]

If profit margins are already tight in the UK, there is no way the importers/retailers can absorb 10-25%.  I'd imagine that USA instruments will be getting hiked by whatever that amount is, unless there are exceptions to Trumps blanket tariffs and/or there are back door imports via countries that don't have tariffs imposed... which will be none.   

 

If prices are hiked you can rest assured they won't go back down if Trump eases tariffs or is deposed.  

[Mediocre Polymath]

Fender are going to be in quite a pickle, that's for sure. Don't they have two factories not far apart, one on either side of the US-Mexico border?

[Woodinblack]

27 minutes ago, warwickhunt said:

If profit margins are already tight in the UK, there is no way the importers/retailers can absorb 10-25%.  I'd imagine that USA instruments will be getting hiked by whatever that amount is, unless there are exceptions to Trumps blanket tariffs and/or there are back door imports via countries that don't have tariffs imposed... which will be none. 

 

I am guessing that within the US, they will stop selling the mexican and chinese squiers, and instead sell the indonesian built ones, its quite easy to get round a blunt tool like a tariff if you have a large manufacturing base, although I assume that will make the prices in the US go up either way. In canada I am guessing the prices of all american instruments are going to fall drastically, so maybe dingwall can start concentrating on super Ps and Super Js!

Maybe the price of mex squiers will go down a bit around the rest of the world as the americans won't be buying them? Hard to tell.

It really is going to affect fender quite heavily as the two factories are only a few hours from each other.

 

I guess it depends on what he does with tarrifs in other places that will affect us here.

[gjones]

So far, the UK has been seen as too insignificant for tariff hikes but who knows what the future holds.

[12stringbassist]

It will go kapow....

[warwickhunt]

It looks to me that if we on BC are representative of most instrument buyers, then post tariff prices will mean we don't buy new American produce; ergo American manufacturing suffers and they need to reduce pricing in order that we buy again... or am I looking at it too simplistically?    

[chris_b]

12 minutes ago, warwickhunt said:

It looks to me that if we on BC are representative of most instrument buyers, then post tariff prices will mean we don't buy new American produce; ergo American manufacturing suffers and they need to reduce pricing in order that we buy again... or am I looking at it too simplistically?    

 

That’s how it will go.

 

Used gear will become more desirable and music shops and businesses will have to switch to non-US manufacturers or fail. Buy all the new gear you need now (that goes for everything else made in the US).

 

Get your budgets in place and batten down the hatches. . . . the clown show is just getting started.

[Steve Browning]

Cast your mind back to covid and the lack of processesors for amps. I suspect they'll get 10% going into the US and maybe 25% coming into another country. Maybe the UK eventually. 

[Steve Browning]

VAT is after the Duty so the actual increase will be 30% on a 25% increase. 

[Woodinblack]

19 minutes ago, warwickhunt said:

It looks to me that if we on BC are representative of most instrument buyers, then post tariff prices will mean we don't buy new American produce; ergo American manufacturing suffers and they need to reduce pricing in order that we buy again... or am I looking at it too simplistically?    

 

Well after a while that will just because the price of US products, so maybe it will settle then. I mean the recent price of a lot of american instruments is pretty crazy, so if that goes up by 25%, obviously noone would get them at the time, but after a while are people not going to say 'oh that is the going price of an american P' or something?

[Lozz196]

It’s started already, there’s an MIM Precision on eBay at the moment for £800. 

[Burns-bass]

This is going to put UK politicians in a real pickle. Trump is anti-Europe and will wage a trade war. The UK can, if it wants to, placate him and avoid that. But the risk is that we upset Europe and put a greater barrier in the way. 

 

It's fascinating and scary in equal measure.

 

Prices here will increase and I can see that having a huge impact on consumers which is of course, you and me.

[chris_b]

10 minutes ago, Burns-bass said:

This is going to put UK politicians in a real pickle. Trump is anti-Europe and will wage a trade war. The UK can, if it wants to, placate him and avoid that. But the risk is that we upset Europe and put a greater barrier in the way.

 

 

Sorry but you can't placate a madman. Trump is a bully and a taker. Give him what he wants and he will be back for more.

 

We have to get real and finally admit we are Europeans and Europe is where we will prosper in the long term. We have to make that work for everyone's sake. I pray I am wrong, but there is very little chance of a happy future for the US with Trump in charge, and in 4 years time the voting really will be rigged. A 3rd term for Trump or Trump Jr is almost a certainty.

[Cato]

International supply chains being wht they are these days I suspect that a lot of US manufacturing, including guitars,  involves some Chinese components or raw materials meaning that there could be a double hit for US companies once on the cost of the components they need and again on exporting the finished product to any country with retaliatory tariffs.

 

So even if the UK manages to stay out of the trade war it's likely that we'll stil  see an increase in the price of US guitars.

Edited February 3 by Cato

[chris_b]

The US National Debt currently stands at $36 trillion!! Most of it is owed to China and Japan.

 

Why is China playing Trump's tariff game? At a stroke they could end all this nonsense by calling in their loans, or at the very least refusing any more loans.

Edited February 3 by chris_b

[Cato]

5 minutes ago, chris_b said:

 

Why is China playing Trump's tariff game? At a stroke they could end all this nonsense by calling in their loans, or at the very least refusing any more loans.

 

I honestly think Trump would just cancel the debt.

 

His whole international position seems to be "we're the biggest kid in the playground, we'll take what we want and there's nothing you can do about it" 

 

And it applies equally to both long term allies and enemies.

 

How realistic that position is and whether the US really is still the biggest and baddest, I guess we're all going to find out over the next few years 

Edited February 3 by Cato

[Little Dragon]

I can see me personally being more likely to be effected by things like string prices than instrument. Not sure how a n EU retaliatory tariff would then effect buying from, say, Thomann , with a US tariff combining with post Brexit red tape.

[chris_b]

35 minutes ago, Cato said:

His whole international position seems to be "we're the biggest kid in the playground, we'll take what we want and there's nothing you can do about it" 

 

 

Unfortunately he's right, but this attitude still has to be fought.

 

I've just been listening to a Trump on Europe podcast. He's after the EU with a vengeance, but thinks he has a good relationship with Keir Starmer, so, "We will work something out". That sounds very ominous and is probably Trump code for, " Starmer is going to roll over and do what he's told". The UK cannot fall out of step with the EU in negotiating with Trump, under any circumstances.

Edited February 3 by chris_b

[gjones]

1 hour ago, chris_b said:

The US National Debt currently stands at $36 trillion!! Most of it is owed to China and Japan.

 

Why is China playing Trump's tariff game? At a stroke they could end all this nonsense by calling in their loans, or at the very least refusing any more loans.

 

I'm assuming they've bought government bonds not handed them suitcases full of cash. They can't hand the bonds back and ask for a refund

 

[gjones]

 

If Fender can't sell Mexican made instruments in the US, they will have to try and sell them to the rest of the world, not affected by the tit for tat tariffs. 

 

Hopefully one of those countries will be the UK. Maybe we'll get a load of cut price MIM Fenders dumped over here - they have to sell them somewhere?

 

Silver linings and all that....

 

[chris_b]

4 minutes ago, gjones said:

 

They can't hand the bonds back and ask for a refund

 

 

I thought that, which is why I added the "refusing more loans" bit.

 

I believe the support for Ukraine is funded by loans and some of the US borrowing even goes towards paying off interest on the debt!! 

[tauzero]

6 hours ago, Woodinblack said:

In canada I am guessing the prices of all american instruments are going to fall drastically

 

Surely they'll rise by whatever across-the-board tariff Canada puts on US imports.

 

At the moment the UK seems to be in Trump's good books (Mandy's arse-licking volte face may have something to do with that) so there may be no tariff war between the UK and US, hence no price increases. This may change if there's a US-EU tariff war and the UK tries to stay onside with the EU (the most sensible course of action).

 

Edited February 3 by tauzero
Link to explain Mandy and his volte face

[Woodinblack]

15 minutes ago, tauzero said:

 

Surely they'll rise by whatever across-the-board tariff Canada puts on US imports.

 

Sorry, I meant sales!