Tarriffs

[RedCharles]

Being that most of the new gear that we buy is made in China, and the US and China are in a trade war, how much should we expect prices of consumer electronics to rise?

Will companies like SVS bring operations back to the US? Or will they shift operations to Malaysia or Vietnam?

I wonder how much SVS cut costs by manufacturing their products in China. Is it 50 percent cheaper? 25 percent cheaper?

I'm hoping someone has first-hand knowledge here.

 

[highfigh]

Being that most of the new gear that we buy is made in China, and the US and China are in a trade war, how much should we expect prices of consumer electronics to rise?

Will companies like SVS bring operations back to the US? Or will they shift operations to Malaysia or Vietnam?

I wonder how much SVS cut costs by manufacturing their products in China. Is it 50 percent cheaper? 25 percent cheaper?

I'm hoping someone has first-hand knowledge here.

AV equipment has been made in Malasia and Vietnam for decades- if the manufacturers decide to move back, it will take less time than the initial start-up.

Wages and regulation are the main reasons we can't have cheap and 'Made In The US' at the same time. Economy of scale and advances in technology allow for miniaturization, so most of the labor involves assembly- mount the boards, plug in some connectors, mount the face and cover and it's basically done, other than loading firmware and testing whatever number they do.

In the past, there was much more hand-work require to build this stuff and that's one reason the quantities were lower. Look inside of a 1970s Sony piece and you'll see wire bundles that were nicely tied with string, rather than wire ties or the twisted loops with a ball on the end. Someone had to insert and solder the components, although wave soldering had come along in the late-'60s.

China has been screwing us for a long time, but nobody bothered to do anything about it.

 

[lovinthehd]

We collectively screwed ourselves with China. Everybody played the game when they went shopping. Walmart anyone?

I would like to see a breakdown of who imports what audio gear from where, but am too lazy to go dig thru records (or pay for the info), as to China vs Malaysia vs Vietnam (or even Japan, Taiwan and Korea now).

 

[WaynePflughaupt]

It’s mainly only consumer products that have moved overseas. There is still plenty of manufacturing being done in this country in the industrial and commercial sectors.

In the past, there was much more hand-work require to build this stuff and that's one reason the quantities were lower.

And the prices were higher! People don’t understand how off-shoring and miniaturization have driven down prices. I think I paid $150 for my first front-end in about 1976, a Marantz integrated amp with only 30 watts RMS per channel. That same piece, or at least that price, would be nearly $700 today. Today a $250 AVR has infinitely more features, and more power, too.

Or working backwards, that $250 receiver would have cost a mere $56 dollars in 1976.

You can find on-line back issues of the annual Radio Shack catalog. Perusing one of those things, the prices listed for much of the gear would make most people choke today! But people paid it. People routinely paid $4-500+ back then for up-scale stereo receivers from Marantz, Pioneer, Yamaha, etc. That’s over $2000 in today’s dollars!

Regards,
Wayne A. Pflughaupt

 

[highfigh]

It’s mainly only consumer products that have moved overseas. There is still plenty of manufacturing being done in this country in the industrial and commercial sectors.


And the prices were higher! People don’t understand how off-shoring and miniaturization have driven down prices. I think I paid $150 for my first front-end in about 1976, a Marantz integrated amp with only 30 watts RMS per channel. That same piece, or at least that price, would be nearly $700 today. Today a $250 AVR has infinitely more features, and more power, too.

Or working backwards, that $250 receiver would have cost a mere $56 dollars in 1976.

You can find on-line back issues of the annual Radio Shack catalog. Perusing one of those things, the prices listed for much of the gear would make most people choke today! But people paid it. People routinely paid $4-500+ back then for up-scale stereo receivers from Marantz, Pioneer, Yamaha, etc. That’s over $2000 in today’s dollars!

Regards,
Wayne A. Pflughaupt

The Pioneer SX-1980 came out in 1978 and IIRC, the list price was $1200 and the Sony TA-4650 integrated amp I bought in '78 listed at more than $1550, for 30W/channel. I bought a turntable in '82- the list price for that was over $1000, the cartridge listed at over $500 and the FM-only tuner I bought as B stock listed at $900 in the late-'70s. I'm sure glad I could buy this stuff at the salesman's accommodation price. I can't imagine paying for a >$3700 FM tuner.

The Sony CDP-101 retailed for $900- that adjusts to almost $2300 now.

 

[Midwesthonky]

A lot of the final assembly may move to another country, but not the US. The components will still probably be made in China. The tariff game is complex. A lot depends on how the law was written. So it may be if it's direct shipped from China, you get hit with tariffs. But if it's shipped to Vietnam or Indonesia or wherever, and a sticker or final assembly is made there and then shipped to the US, it may clear tariffs.

I don't expect manufacturing to come back to the US. EPA rules and OSHA regulations mean it's cheaper to manufacture in foreign countries like China, Vietnam, etc where they simply do not have the environmental laws nor the workplace safety regulations. Cold, but it's the reality. Plus paying someone $5 a day in places like Vietnam vs the US still makes a big difference in the cost to WalMart and other big box retailers.

As for the new tariffs, I have a supplier of mine (not electronics) that has sent out emails saying to check prices daily when giving quotes. If they have the material in house already, then no tariffs. If it comes from China and isn't here yet, it may or may not have tariffs. They are going through each one of their SKU's and having to check every single product they sell against the latest published tariffs. Makes it tough to quote as you don't know if the price will be accurate or not. They sells 10,000's of products so there is a ton of labor involved with checking to see if they are being compliant. Someone has to pay for that and it isn't China.

 

[lovinthehd]

A lot of the final assembly may move to another country, but not the US. The components will still probably be made in China. The tariff game is complex. A lot depends on how the law was written. So it may be if it's direct shipped from China, you get hit with tariffs. But if it's shipped to Vietnam or Indonesia or wherever, and a sticker or final assembly is made there and then shipped to the US, it may clear tariffs.

.

FWIW while parts can be added or assembly or work on a product can be done in another country there are already rules of origin that would dictate as to what extent it would need to be to determinewhether it is origin China or another country. There are trade agreements for countries/associations of countries for specific duty free programs like GSP, or NAFTA (or drumpfcmus or whatever the truck he calls it now) that have particular origin criteria; I fortunately haven't had to delve into NAFTA/drumpfcmus since retiring so not sure what has changed there particularly for that or other particular agreements but don't think general origin rules have changed. Merely transshipment via Vietnam or adding simply a sticker saying made in Vietnam is quite illegal and hopefully Customs would manage to catch it and enforce it but who knows.

 

[GO-NAD!]

It’s mainly only consumer products that have moved overseas. There is still plenty of manufacturing being done in this country in the industrial and commercial sectors.


And the prices were higher! People don’t understand how off-shoring and miniaturization have driven down prices. I think I paid $150 for my first front-end in about 1976, a Marantz integrated amp with only 30 watts RMS per channel. That same piece, or at least that price, would be nearly $700 today. Today a $250 AVR has infinitely more features, and more power, too.

Or working backwards, that $250 receiver would have cost a mere $56 dollars in 1976.

You can find on-line back issues of the annual Radio Shack catalog. Perusing one of those things, the prices listed for much of the gear would make most people choke today! But people paid it. People routinely paid $4-500+ back then for up-scale stereo receivers from Marantz, Pioneer, Yamaha, etc. That’s over $2000 in today’s dollars!

Regards,
Wayne A. Pflughaupt

The Pioneer SX-1980 came out in 1978 and IIRC, the list price was $1200 and the Sony TA-4650 integrated amp I bought in '78 listed at more than $1550, for 30W/channel. I bought a turntable in '82- the list price for that was over $1000, the cartridge listed at over $500 and the FM-only tuner I bought as B stock listed at $900 in the late-'70s. I'm sure glad I could buy this stuff at the salesman's accommodation price. I can't imagine paying for a >$3700 FM tuner.

The Sony CDP-101 retailed for $900- that adjusts to almost $2300 now.

I wonder what the audio/video community would look like if the majority of products were still being manufactured in N.A/Europe/Japan. How many would be members of Audioholics forums? I would wager that there'd be far, far fewer of us. Would the cost of entry be so high, that the "home theatre" would be found only in the homes of the affluent? Of course, there are other factors to consider - automation and increased productivity have contributed to the drop in costs, along with offshoring. So, it would be difficult to say what the environment would look like if audio/video component production had largely remained in N.A/Europe/Japan, but I think it would be smaller.

 

[highfigh]

I wonder what the audio/video community would look like if the majority of products were still being manufactured in N.A/Europe/Japan. How many would be members of Audioholics forums? I would wager that there'd be far, far fewer of us. Would the cost of entry be so high, that the "home theatre" would be found only in the homes of the affluent? Of course, there are other factors to consider - automation and increased productivity have contributed to the drop in costs, along with offshoring. So, it would be difficult to say what the environment would look like if audio/video component production had largely remained in N.A/Europe/Japan, but I think it would be smaller.

I'm not sure that would be such a bad thing. Less confusion, possibly less BS in advertising, too. It wold be interesting to know how much impact the Chinese government has on the pricing and the amount of manual labor involved in devices other than speakers.

I have to admit that the fit & finish of the Chinese speakers I have seen is excellent.

 

[shadyJ]

I have to admit that the fit & finish of the Chinese speakers I have seen is excellent.

Everytime I hear someone gripe about the quality of Chinese manufacturing, I have to roll my eyes, especially regarding loudspeakers. Chinese manufacturing can have a range of quality, and, as with most things, you get what you pay for. Chinese manufacturing can produce great quality products with superb quality control, or they can make flimsy junk. As a signifier of manufacturing quality, China as a country of origin means pretty much nothing nowadays, and each product has to be evaluated on its own terms.

 

[highfigh]

Everytime I hear someone gripe about the quality of Chinese manufacturing, I have to roll my eyes, especially regarding loudspeakers. Chinese manufacturing can have a range of quality, and, as with most things, you get what you pay for. Chinese manufacturing can produce great quality products with superb quality control, or they can make flimsy junk. As a signifier of manufacturing quality, China as a country of origin means pretty much nothing nowadays, and each product has to be evaluated on its own terms.

I have read and heard that it's less a matter of what someone pays for, but what their representatives make sure they get- many cases of paying someone for something, that supplier farms it out to someone else who does the same, all profiting from the transaction and "doing it for less" before shipping it off and the seller saying "What is this? That's not what I wanted!" and having to start over. lots of power tools that came here with un-tempered cast iron that eventually warps and cracks, breaks because it has voids and electrical components that last minutes, rather than a year or two. The seller's representatives have a big job and they need to be diligent- they risk their reputation or worse, their business.

Many Chinese firms are buying corporations in foreign countries, as a way to make more money and shorten the distance from the consumer to the Chinese coffers. It's up to them to make products that are good enough to maintain sales, but I wouldn't expect them to necessarily avoid patent infringements.

 

[bigkrazy155]

...but I wouldn't expect them to necessarily avoid patent infringements.

Isn't this more or less the main problem? I believe the Obama administration estimated $480 billion annually in Chinese intellectual property theft. The Trump administration estates $300 to $600 billion.

 

[panteragstk]

Isn't this more or less the main problem? I believe the Obama administration estimated $480 billion annually in Chinese intellectual property theft. The Trump administration estates $300 to $600 billion.

Any source links?

 

[bigkrazy155]

Any source links?

https://www.bloomberg.com/news/articles/2015-11-18/no-sign-china-has-stopped-hacking-u-s-companies-official-says

https://money.cnn.com/2018/03/23/technology/china-us-trump-tariffs-ip-theft/index.html

 

[panteragstk]

https://www.bloomberg.com/news/articles/2015-11-18/no-sign-china-has-stopped-hacking-u-s-companies-official-says

https://money.cnn.com/2018/03/23/technology/china-us-trump-tariffs-ip-theft/index.html

I knew it was bad, but not that bad.

 

[lovinthehd]

Wonder how much that might resemble the gubmints idiotic drug bust transaction values. Then wonder how much of the total is just entertainment industry stuff....

 

[Midwesthonky]

https://www.bloomberg.com/news/articles/2015-11-18/no-sign-china-has-stopped-hacking-u-s-companies-official-says

https://money.cnn.com/2018/03/23/technology/china-us-trump-tariffs-ip-theft/index.html

15-20 years ago, when I worked as an engineer, I would work hard with our buyers to not send tooling to be made in China. By tooling, I mean metal stamping tooling, plastic injection mold tools, etc. Simply put, the Chinese supplier would be cheap, but they would make 2 or 3 molds. You'd get the crappiest one of the three. The other two would be sold off so Chinese companies could make and sell knock off parts using molds made from your actual drawings.

A competitor to my wife's current employer signed a deal to have some machines assembled in China in order to gain access to the Chinese market. Surprise! A Chinese manufacturer is now making the exact same machines in China right down to the exact same known defects in the design.

Yes, it's bad.

 

[lovinthehd]

15-20 years ago, when I worked as an engineer, I would work hard with our buyers to not send tooling to be made in China. By tooling, I mean metal stamping tooling, plastic injection mold tools, etc. Simply put, the Chinese supplier would be cheap, but they would make 2 or 3 molds. You'd get the crappiest one of the three. The other two would be sold off so Chinese companies could make and sell knock off parts using molds made from your actual drawings.

A competitor to my wife's current employer signed a deal to have some machines assembled in China in order to gain access to the Chinese market. Surprise! A Chinese manufacturer is now making the exact same machines in China right down to the exact same known defects in the design.

Yes, it's bad.

So who's to blame more? The companies sending such to be copied or them for doing what is not a surprise?

 

[Ponzio]

Not to defend the Chinese but this has been going on for all of human history.

Alexander Hamilton himself was in charge, with George Washington's approval, in covertly stealing English textile secrets by offering exorbitant pay to Scottish textile plant workers/designers to compete and avoid the high cost of English clothing in the late 1700's.

US and European corporations share a lot of the blame by agreeing willingly to hand over intellectual property over to the Chinese. Nobody put a gun to their head. Combined with the Chinese government's stealing the technology whenever possible and undervaluing their currency, compared to the rest of the world, and you have the situation were in now.

Google was one of the few exceptions who left the Chinese market when they caught on to the hacking of their servers in China and refused to hand over their code.

 

[davidscott]

The Pioneer SX-1980 came out in 1978 and IIRC, the list price was $1200 and the Sony TA-4650 integrated amp I bought in '78 listed at more than $1550, for 30W/channel. I bought a turntable in '82- the list price for that was over $1000, the cartridge listed at over $500 and the FM-only tuner I bought as B stock listed at $900 in the late-'70s. I'm sure glad I could buy this stuff at the salesman's accommodation price. I can't imagine paying for a >$3700 FM tuner.

The Sony CDP-101 retailed for $900- that adjusts to almost $2300 now.

I bought a Magnavox fd-1000 back when they first came out in the early 80s. I don't remember the exact amount but it was well over $500. Sounded great as I remember but not as good as my current NAD under $300 player. Wow I cant believe I found the $$ back in the day when I was relatively poor.