Trade Tariffs and the effect on synth marketplace

It was interesting to read both Moog’s email and the MOTM guy’s reaction - he has a Harlan Ellison-like reputation (RIP Mr. Ellison). Moog, like this Swedish company and that German company, has its haters’ brigade.

I’m close to geared-out anyway. It’ll suck to have to pay 1250 Euro instead of 999 Euro for a Medusa - that’s the one remaining piece I have my eye on. Ok, maybe a Digitone too.

Lol.

Would be interesting if Moog responded, but they have so much goodwill built up in the music community that they might feel like they don’t, or shouldn’t, have to.

I can promise you prices will go up unless we find a workaround.

I’ve been making effects pedals and synth modules for 11 years, and the whole time we’ve operated with a razor thin margin (as far as “business pros” are concerned) in an effort to keep our stuff at a competitive price point.

There is no 25% wiggle room. i Haven’t seen price increases on our aluminum or pcbs yet but components are already rising in price as well as being hoarded.

I AM NOT EXCITES.

Lets take for example a large mixer with many potentiometers lets say 100, and for simplicity sake lets assume the price of each was $1 each, now the price is $1.25, so the mixer increases in cost price by $25, now add the passive components such as capacitors and resistors, increase by 25% which is probably about at most $5 - hardly worth worrying about, providing the manufacturer only adds the actual cost of the affected components.

This is assuming that the information about components affected by the tariff are correct.

Even with the tariff US customers will still get the products much cheaper than the rest of the world pay for the same product, so there’s that.

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True, but I’d be willing to bet that consumers (let alone US consumers :face_with_raised_eyebrow:) don’t look at the cost of products relative to other consumers, just how much it will cost them. Especially for a luxury or hobby good.

It would be interesting to know what the inflection points are for consumers to say, No, to products at different price points, e.g. is it a $25 increase for a $100 mixer? $125 for a $500 synth?

Quite, I often laugh when I see a US synth buyer complaing about prices, for example saying a $1000 synth is “waaaay overpriced” when often the price of the exact same product elsewhere is £1200/€1300, and often in some countries even more, and of course the $ is worth less than the £/€ so converted it is equivalent to over $1500. It gets even funnier when UK or Europe made products are cheaper in the US than in their country of manufacture, cough Elektron cough :wink:

I guess if the 25% increase is on the whole product it could be significant enough to question the purchase, but from what I understand the 25% should only be applied to the affected components, which make up actually in most cases less than 10% of the finished product cost, so realistically a 2.5% - 5% increase is about what we should expect to see.

As is often the case these days, the news hits and people have knee jerk reactions, understandable but perhaps a tad misguided, and we all do it.

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From what i’ve heard those are affected :
caps
pots
resistors
leds

Not affected :
assembled pc boards ,
blank pc boards
switches,
jacks
rotary encoders

So … no … a Moog is not going to cost 25% more.

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^ That is what I understand, most of the cost of hi-tech gear is enclosure, screens, specialist ICs, microprocessors, memory, custom parts like knobs, keys etc, pcb, hardware. None of these will be affected.

Though from the email Moog sent out, it feels like they are priming customers for a 25% increase in prices.

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Either that or they did not do their research, or they are politicising. Who knows.

Moog has always been a premium brand, I think they are a great company who make great products so whatever happens I hope they won’t be as badly affected as they seem to believe.

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Agree completely. Especially when one considers that these devices aren’t necessities. They are luxuries. People that can afford them should be thankful that they can.

I was using your mixer hypothetical as he example/starting point. I think that at this point there are too many unknowns…

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Moog politicize something? Naaaaaaah… :face_with_hand_over_mouth:

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It seems that PCB assemblies manufactured in China will be subject to the tariff, but unpopulated PCBs will not be subject to the tariff, Moog say that because they buy the PCB assemblies from China they will be affected and jobs might be lost. It seems strange to me why they don’t simply change to buying unpopulated PCBs and assembling them in the US, and that would create rather than cost jobs.

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Just a very - very general opinion about all of this …

IMO punitive tariffs are necessary, if other nations subsidise products, which is unfair and indeed compromises local business. AFAIK China does this plenty of the time for critical raw materials and products as well (example: solar panels, human ressources etc.).

But the most overseas export/import cases from the EU are not driven by exceptional-low prices of EU based manufacturers. Example: Cars like Audi, BMW, Mercedes are as expensive in other countries as in Germany. I think, nobody buys them, because they are more affordable then other cars from the local industry. Often those companies have subsidiaries, which produce for the local markets directly in the region and create jobs there. Same goes for industrial products of the EU like production facilities, power plants, machines etc. In such cases punitive tariffs are helping nobody and creating damage for everybody. At the end this will cost jobs on all sides.

My problem here - and that’s very frustrating - is an administration with much influence, which seems to act irrational. I strongly believe that somebody in the US will make a profit out of this, but at the cost of many people wordwide, who only want to make a good job and living and would prefer to be better left alone :frowning:

US agriculture is heavily subsidised, allowing product to be sold very cheaply. Flooding foreign markets with cheap (dairy for example) can destroy that foreign market’s domestic production facilities (Canada for example).

That seems not to be well understood by DT.

I’m not expecting Detroit (or elsewhere) will become the new Guangzhou and everyone will be employed making resistors and microcontrollers and that the price this will be done for will make any sense either for the labour cost nor the end component.

Sadly, as ever, it will be the third world that will suffer most if a trade war escalates.

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W.r.t. agriculture the EU has to be blamed too. AFAIK there is already destruction of local agricultural market in Afrika and policies of companies like Monsanto make it even worse … but that’s a complete other story and off-topic.

Yes agreed and we are veering off-topic!

Synth/technology-wise perhaps the long term effect of all of this may not be significant, but it would be interesting to see home 3D printed circuit boards/bespoke processors (without components) seem more economically viable.
FPGA type technology perhaps. Roland are already there in a sense with downloadable ‘synthetic’ synths

TBH I think this hassle will not last long. The biggest players of business in the world are operating internationally and they will have the most important impact on politics. I expect that they have already a plan B in place, if the US administration persists to continue or even extend this tariff war. They will not wait like in a “last men stands”. Since decades business is not patriotic, it’s about making money.

Many complain about the growing globalisition of industry and business, but it may be that just this will save us … somehow … from economical losses. Well, may be that this has been the plan all the time, to create more acceptance of globalisation :wink:

I always like the fact the Rane made all ther mixers in USA and we of real high quality.

Sure it meant a little more cost but you got a good company that made things in house and gave you years of support. I tried getting help from Vestax once …impossible.

With rane they send me out free parts twice.

So maybe if tarriffs begins to be a problem company’s could relocate to our advantage. Who knows tbh

And therein lies the problem. Indian steel, Chinese electronics, American beef, all benefit from similar practices in their home country that afford them unfair advantages on the export market. Tariffs, subsidies, tax relief and anti-dumping laws all achieve the same thing: pay back to local and national political supporters. Graft. Cronyism.

Some industry analysts have run numbers that indicate each Tesla Model S sold costs the US taxpayer $300,000 due to subsidies. Assuming this is true, this is a huge distortion in the market, IMHO. It all causes one to wonder about the actual cost for all of these things we take for granted in our daily lives.

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