It does. American workers will actually make better guitars knowing that the country and its citizens have their backs and that they don't have to compete with cheap crap made by blind children in a country where only elite has actually ever heard rock music. God bless the USA.
Good on you, Chris. You are the first guitar RUclipsr I've seen who has addressed this issue. I knew a fair amount, but I learned a lot from your even handed presentation
@@santosmadrigal3702 He never said we can't make things. It is economics and the question is "are people ready or able to pay the price increase?" The build out of manufacturing that would be needed to fulfill the myth would most likely take decades and all that time we would be paying higher and higher prices. It will never again be the 1950's and for people who believe so, well ask those horse and buggy builders and whip makers how it worked out for them after cars took over.
@@urdrwho1 so your OK with shipping all American jobs to forgin county's . The Amish make all their goods at home . The Amish's products are quality . Ain't no illegal immigrants in their farms . Next time you drive past an Amish community see what you can see . ( 50's horse and buggy) Get off your cellphone , and build stuff .
@@Cousin_Gregg I don't think it would have. Most of the people who don't know how a tariff works have absolutely no inclination to learn about it. They just have a blind faith that it's a good thing because a person they like suggested it.
@@Tijuanabill You really haven’t thought this through. The reason products are cheap to buy is because they are cheap imports. If Trump Tariffs mean those products are too expensive for companies to bother importing, Americans are just left with the expensive products made in America. American companies will now have no foreign competition and can jack up prices. For a population complaining about the high prices of goods, tariffs are the exact opposite of what you would do in order to reduce prices. Well done, Trump voters. 🤦♂️
@@Tijuanabill but, that will depend on so many factors…if Trump goes full bore on tariffs then the entire economy will suffer. Many US made products rely on China for raw materials and parts. Personally I think he pulls back if he sees if will hurt us..
Brexit = 4% drop in standard of living in UK. Look for same in US with economic isolation and trade wars. Everyone loses in a trade war except the politicians who brought it on.
@@Tijuanabill 🤦♂️😂 Much of America’s imported foods are from Mexico and Canada. There are currently zero tariffs on those because of the free trade agreement, but Trump has said he wants to impose a 25% tariff on Mexican and Canadian goods. So, good luck buying cheap groceries next year. You’re also incorrect that every single American product sold outside America has a tariff on it. And if there was free trade between America and every other single country, America would absolutely not dominate it because your cost of labour and production are significantly higher than the majority of countries on earth, making your products far more expensive. I mean, Jesus, dude, you’re on a guitar channel. Have you never figured out why guitars made in Mexico are much cheaper to buy than the guitars made in America, even though there’s a very little difference in actual quality?
Thanks for this important update. I have a degree in marketing and have seen how most Americans do not have a clear understanding of basic economic principles.
That's only one of many reflections on the fact that not much is taught in public schools, for the last 20yrs, anyway...Not much with any relevancy to everyday life...
Yeah, the guy says a lot of things that are easily proven false. We’re not at the point yet where we should be taking any of it seriously enough to worry about.
@@wallofrock6725 It's a 13 min video dude. He can't explain Global economic stressors and variables to everyone. But hey, start your own channel and go for it. I'd tune in.
@@wallofrock6725 It's not one sided, it is basic eco 101 on how tariffs work. Importers pay, then we pay and the country of origin never, ever, never paid. Ya get that!
What a lot of people don’t realize is that a 25% tariff doesn’t result in a 25% price increase. Profit is based on margins so whatever margin applies to the cost of the guitar also applies to the tariff. So, if you have a product with a 100% markup a 25% tariff will turn into a 50% price increase by the time it reaches the consumer
Tariffs are based on the declared value of a product. So if an Amazon guitar costs $100 and you want a 50 margin the sell is $200. If you add a 25% tariff, the cost goes up to $125.00 which changes the sell to $250. Most items have a perceived value so Amazon may decide to accept a lower margin to maintain sales and sell it for $212.50. Or the likely outcome is Quid Pro Quo and they make a deal since the other option is to move production to another country not affected by tariffs.
@ 50% margin doesn’t double the cost; a 100% margin does. That said, after the distributor has added a margin, the retailer will then ad another margin which, again, includes the tariff in the cost. A 25% tariff will in no way still be 25% by the time it reaches the customer.
What you present is a study in math. If your stock price drops 50% from one dollar to fifty cents. How much of a percentage does that stock need to rise to get back to $1.00. You would be amazed at how many people answer 50%.
Every step of the way, sellers are going to use the same markup they do now. Most consumer products get a 100% markup by retailers. There are markups at the wholesale level. AMERICANS are going to pay.
This is the a global version of the 1983 Memorandom on Heavyweight Motorcycle Imports enacted by Pres Reagan Administration to save Harley Davidson from bankruptcy. It was put on any bike over 700cc which is what caused the growth of all 600cc and 650cc motorcycle production mainly from the Japanese mfrs but included all imports. Prices went up for everybody and everybody just paid more to ride.
And Harley became HUGE, so instead of "competing" more fairly, they just jacked up THEIR prices along with the others, and it's a never ending cycle, with the large, greedy corporations (and the government) being the only winners with tariffs.
@@RussReiterMusic Exactly why no one rides anymore and why Harley is pretty much loathed by most Americans now, they price gouged their self right out of business within a few more short years.
@ lol! Yeah, the T-shirts are at least affordable. but they market the 28k sportster or 38k soft tails to the boomer/genx grey beards who have all the money but can’t even hold the bikes up anymore and aging out, they literally lost the next 3 generations who despise them, Harley is done and thats what greed did.
This post deserves a wider audience than guitarists. Thanks, man. I will also say that even if guitar manufacturing or anything else for that matter was on-shored to the USA, it would take us years, perhaps decades to catch up to current international levels. As the Stones said, “You can’t come back and be first in line.” Yes, the USA still makes great guitars but manufacturing in general? The USA will need to dig deep for the motivation and commitment to make it happen. It’s a long term proposition in a land concerned more with the moment.
People who unironically call PRS' dentist and lawyer guitars are finally waking up to the fact that maybe executives dont deserve so much wealth in comparison. These same people think Musk deserves a 100B pay package because "he's a genius" are honestly just ignorant fools
Fender, Gibson, and lots of boutique builders cater to the hedge-fund trade. Custom Shop is code for "overpriced oatmeal". Not saying they aren't quality instruments but they aren't anything special, either. Like ears of corn, just cranked out by the thousands. Do they really sell them all? Or most people just buy a Vintera MIM or an Epiphone from China? Or now the budget lines are made in Indonesia. What's next?
People in high places have assured me that China will pay for the tariffs (you know, like Mexico paid for that wall)....Maybe its time for Paul Reed Smith to make a pilgrimage to Mar a Lago.
So why then did Biden not only KEEP the tariffs to China he Increased the tariffs? Do some thinking. Turn off the TV... the rest of the world has Figure it out... the rest of the world has
These people in high places are simply wrong the tarrif is paid by the American importer at US customs, which they will then have to pass on to the consumer in order to make a profit. Plain and simple. The only effect this would have on China is that the American importers may be more reluctant to buy the product in the first place, leading to shortages for the consumer.
It's amazing how many people don't understand this concept. A tariff is a tax on goods. The money comes out of your pocket and goes into the governments pocket.
Either Trump himself really believes that China, Mexico and Canada will be paying the tariffs, or he is straight up lying to the American public. Both are endlessly believable.
Excellent to the point explanation of the tariff situation. I suggest this video be played on MSNBC , CNN, and FOX NEWS so everyone ( a lot of folks, anyway) gets a proper view of the coming (?) possibilities. Good civic work Chris!
Manufacturering isnt coming back to the US. The current tarriffs are already raising prices. Over the past 4 years, imports from countries like Mexico, Vietnam, and Thailand have increased. The problem is the parts those products are made out of still come from China. So instead of those parts being assembled into a final product in China, they get shipped to other countries before being assembled and shipped again to the US. US consumers pay for the Vietnamese, Mexican, and Thai third party handling.
It may not be coming back to the US but a lot of it will be moving out of China. Expect a lot more guitars coming out of Indonesia, India, and Vietnam.
@ true, I personally try to buy American made gear as often as possible. Mainly guitars. I don’t mind spending more on a guitar even if it means I’ll have less guitars overall…sounds crazy I know😃
@@stanlee-eq7lu pretty sure Gibson will see it as another reason to jack their prices up even more, they certainly don’t seem to care about being an affordable option
Also to be considered: imposing tariffs may start a trade war where a retaliating country could: (1) subject US exports to counter-tariffs (thereby diminishing foreign demand for US goods and lowering US employment), and (2) heavily tax or just ban exports to the US of goods that the US does not produce but needs (like some minerals), making these goods painfully expensive to buy (or unavailable like China just did for key rare earth minerals). That said, Chris is right: it will be a quid pro quo between negotiators where the apparent weakness of a party can be compensated by the careful political targeting of retaliatory tariffs. In the end, it's often ends up as a zero-sum bully game that ends up hurting workers and consumers on both sides.
Correct. If you’re not already an Econ nerd, but want to read some fun history, Google “Smoot-Harley Tariff.” That was an early time when the “America First” slogan was championed. It led to the opposite effect of what it was intended to do; raising prices for consumers and sparking a trade war, which led to less U.S. exports (leading to American job losses). I’m not suggesting that Trump’s tariff policy would lead to another Great Depression, but the Smoot-Hadley Tariffs played a role in causing the Depression. Fun times. Buy your guitars now before the price hikes come next year.
So the US loses the battle because we lack a manufacturing base large enough to pick up the slack. In the next 10-15 years China will be the world’s largest economy..unfortunately
No one wins in a trade war, and tariffs have never lowered the prices paid by consumers. Ever. Can you say inflationary? Well that's where we're headed.
so what did he said exactly, what record has been set straight? Same as him, you didn't say anything, just word salad. The answer to the question in the title of this video is simple - nobody knows. It's that simple. But the majority of US has voted for this, so you'll have to put up with it or leave.
@oggyman123 literally, everyone with a brain knows exactly what will happen. This is not Little Donny's first time starting a disastrous and pointless trade war.
Don't really get the bold part. A lot of this could happen without addressing specifics or saying this is what we think will happen. The one thing that was correct is quid pro quo. A perfect example were the Canadian dairy tariffs. The Canadian government was subsidizing their dairy farmers allowing them to sell their products in the US at artificially low prices while also limiting access to Canadian markets for American dairy products. Quid pro quo could also come into effect with Mexico due to political issues that affect the US. You're comment about America failing an open book test means you don't get it and why Trump won both the popular vote and Electoral college. .
Nicely presented. Not mentioned here was the labor market in the US. Almost Every single area of our job market is scrambling for employees and cannot fill positions. After tariffs kick in, Americans are not going to benefit at all with more jobs if no one is there to work them right now in the first place. Food, guitars, everything!, will go up in price.
If the US slaps tariffs on imported guitars, other countries will respond with slapping tariffs on US made guitars. So the export of 'US-made' guitars is likely to suffer intuit scenario.
Well navigated. I don’t blame you for not mentioning them but there some other factors involved here. One would be the effect of reciprocity on goods being exported out of the US to countries affected by American tariffs. That will hurt all manner of businesses in a global economy. For example, farmers needed a bailout the last time Trump put tariffs on Chinese goods. The agricultural industry got hammered when China was no longer buying our crops. Two, tariffs have never LOWERED the cost of ANYTHING. Generally businesses try to find best prices for inputs. If they have to go elsewhere it’ll cost more. Period. This may or may not apply to the guitar market but across the economy CEO’s are making around 300 times what the average employee earns. In 1965 it was 65:1. CEO pay is up 1300% since 1978. Workers wages have risen only 18%. Trillions of dollars have been transferred from the middle class to the top 1%. We SHOULD have the money to buy American but we’re just not keeping up over time.
Agreed. I’m not one to say how much someone can make, but CEO pay has gotten a little out of hand, to put it mildly. If you have a strong middle class, you have more people with larger amounts of disposable income, and the economic wheel can more easily turn. If you have a bunch of people who are strapped for cash, they’ll be less likely to buy stuff, which means less reason to manufacturer goods or hire service staff, etc. and you end up with a downward spiral. If CEO pay was cut (but still really great for the CEOs) and companies had more money for raises, or bonuses, or if you want to argue that U.S. companies need to be more innovative, then fine… more money for R&D, that would seem to be more sensible for everyone. I’m not trying to get political here, but it’s strange to think why someone would vote for someone who has told you straight up that they favor policies that are against your own economic self-interest is behind me. I suppose some folks have principals/social issues that are more important to them than their bank account/retirement savings. To each their own.
Not likely to improve soon. Trump’s incoming cabinet is estimated to have a net worth of 300 billion. Billionaires are not about fairness or altruism or concern for others. They are about making MORE for themselves. How else would they become billionaires?
In history, the UK tariffs on US goods in retaliation for the US holding the UK to the Lend Lease agreement following WWII led to the Beatles using Vox early in their playing. What would most likely hit the US musical instrument market would be tariffs on Canadian oil, which would raise the cost of transportation aka how much sweetwater and G Centers "free shipping" increased the price of guitars etc.
Excellent presentation! There is also an increased overhead cost to the retailer in maintain a "stock" inventory. This may or may not involve additional taxes on inventory or other operating costs.
something to also consider - the expectation of a price increase is the catalyst of more activity in the marketplace. so whether or not there is an actual tariff on something, more demand could also increase the cost of things organically. aka inflation
I'll be holding off on purchasing any guitars if/when this tariff nonsense actually happens. Hopefully it's a bunch of bluster (as usual), but I guess if it happens, it'll give me 4-6 years to save for an ES-335 while the economy eventually recovers from what these imbeciles in power claim they want to do.
Thank you for speaking truth. I only wish more retailers were proactive than reactive and spoke out before the election. Anyone who doesn't think we're going to pay for these tariffs is highly uninformed or living in denial.
Taking guitars as an example, tariffs aren't really needed to "bring manufacturing back to the US. Gibson and Fender and PRS (just examples) already manufacture here in the US. Those instruments are perceived as higher quality, and command higher prices (partly due to that perception, but largely due to labor costs). Raiing the price of an Epiphone or a Squier would not cause me to buy a Gibson or a Fender if I cannot afford them currently. So I am not sure that these companies will be targets of tariffs, unless our gov't just doesn't know what they are doing... oh ...wait a minute...
That was a very commendable presentation. As someone noted, there are other factors. But you covered the gist of the situation. The main question will be if the American public will be willing to pay more for an American made product. Voting wise, they said yes because Trump was elected. But only the future will tell if the public will accept higher prices. 😮
History says no. That's how we got here to begin with. The biggest question is whether we are going to see real improvements when it comes to employment numbers and the federal economy.
FYI The Tea Party was not about Tariffs. It was about the king ending the Massachusetts Bay Colony Charter. The colonists wanted laws to be about the king and representation. The king reacted by adding more taxes after the tea party.
Nice summary. So, if potentially a lot of prices will go up - especially with additional general tariffs applied across the board - what will that do to the inflation rate? 🤔
Those of us living abroad and who frequently buy gear from the US and elsewhere are all too familiar with this. You have to pay customs duties (and VAT) when you pick it up at the post office, and good luck telling the lady behind the window to chase down the seller for the customs portion. Now, if this comes to pass, what *might* happen is that overseas manufacturers lower their own prices to some extent to offset the tariff so they remain competitive, but with net profit margins in most industries typically less than 10%, there's not much wriggle room for them to do that.
A friend of mine owns a manufacturing company in China. He said the USA accounts for about 4% of his sales and he couldn't care less about the tariffs. Tariffs cost him nothing and he won't make any changes. I would guess that a lot of manufactures in China feel the same.
Being up here in Canada, time to buy more Canadian made instruments made with local wood. Imports prices from Asia will likely drop here because of a glut of instruments not being sold in the States. Maybe this will be a great time to buy in the coming years. Only time will tell.
All Godin lines, Norman, Seagull, Simon Patrick, all very good guitars, and let's not forget the Godin Alex Lifeson Limited Edition LERXST, all made in Canada, buy now before the TARIFFS hit
Good points. Question: why is the postage/shipping from Canada so darn high? I mean it's like $40 for a pedal, $200 for a guitar... Insane. It's more than AU, Japan, UK, etc. Has kept me from many a buy.
You are right, I as a Canadian find them outrageous but I do not know all the economic facts. Canada post has a giant mandate to deliver mail right across Canada ( the second largest country on earth) with 1/10 the U.S. population. So they are in major dept as things stand, their operating cost must simply be too high. I.s. rates are good but your dollar is so strong compared to the Canadian that it makes it expensive to buy U.S. Maybe things will level out in the coming years...let's hope!
The irony…..a Texan explaining how MAGA-nomics are bad for Texans……and the entire country……and basically the entire world economy. A day late and billions of dollars short but thank you for this explanation nonetheless. The fact that more than 50% of the population didn’t understand how tariffs work just proves how poorly educated and ignorant we are. And it’s going to much worse. But at least our children will have the 10 commandments branded onto their brains……..
I live in Austria and don’t know if i should buy the CS Gibson now or in spring as planned. I mean if it’s gonna be a small increase i don’t mind paying more but who knows whats going to happen.
Good explanation! However you slice it, we will have uncertainty until we see what actually happens. Meanwhile I've told wife that I have to get my new guitar now!!
@@BobMcc That’s the whole point. Tariffs don’t solve anything when we impose them on countries we already have a good, established, trade relationship with such as our neighbors to the north and the south.
@ well he said he was going to impose tariffs on them as well to pay for “tax cuts” even though he personally negotiated the “greatest deal ever” with them via the USMCA. Guess it wasn’t so great after all.
Plain and simple, tariffs are not a tax on Mexico and China, they are a tax on the US consumer. If you voted for Trump, you voted for higher prices...well done!
But you didn't buy a USA-made guitar which would help our economy & jobs market. The tariff didn't work to help in that way. No blame, and I'm sure many are doing the same thing. But it's yet another blunt MAGA instrument that doesn't accomplish anything good for Americans. Like "banning abortion" leads to complex crises in reproductive care and higher maternal & infant mortality rates. Slogans aren't science. Tariffs are not snake-oil magical solutions.
Ohhh yes they will because the demand for guitars are shrinking everyday as the grey beard boomers and genx die off or age out of the hobby, no new generations to fill the void, and prices will continue to fall steadily as the supply overwhelmingly crushes the demand. It’s Already happening.
Excelleny overview. One Important thing you didn't cover that I'd like to add to folks skimming the commemts is that even on an idealized purely Made In USA good, if the international competition is made more expensive, that price then acts as a higher boundary by which a USA manufacturer can increase its prices while still be effectively cheaper than the international good. Just another way tariffs can cause prices to go up across the board.
The thing that is often forgotten is for example your car breaks down and the parts for the repair cost $100 more. That becomes $100 you don't have buy any gear. Add to that that $200 import guitar is $250 and if you now still want it you have come up with $150 more than pre-tariffs. Then you have those that lose their job making an American car because the parts are imported and you have decided to take the bus. In short everyone is the loser. When the stock market crashed in 1928. It took a few years to have 5% lose their job. They applied tariffs and soon 20% lost their jobs. Then there is the guy that makes heavy machinery who loses his job because China puts a tariff on American made machinery in retaliation.
Pretty fair presentation, steering clear of the political aspects of tariffs. An important thing to note is that the goal with a tariff is NOT always to artificially protect domestic manufacturing. Those who support a given tariff understand that it will increase costs to the end-user, but see that as an acceptable cost of addressing larger issues, like national security, human rights abuses, patent/copyright infringement, or other "bad" behavior.
Canadians just remembering a time where we could cross the border with a smile and driver's license. Now we're threatening to turn the lights out in Michigan. What a world!
Here’s something that I don’t understand, perhaps it has something to do with tariffs. - boss katana amp, a Japanese brand made in Malaysia. - boss katana amp retail price in Malaysia is higher than in Europe - boss katana amp retail price in Europe is higher than the states How is it something made in Malaysia gets sold in Malaysia at a higher retail price than Europe and the states?
The other impacts even for American made goods are Tariffs on the component parts that are not manufactured in the USA, also the other one that no one is talking about that is likely to happen is the volume that the USA companies make are likely to fall as the export markets retaliate with counter tariffs so that will make the goods in America more expensive. The other likely impact is for Companies like Martin , Fender, and Taylor who have Mexican operations , they are likely to shift production from the USA to Mexico to serve the rest of the world.
I got a MIM Taylor 114e for $630 from Guitar Center some years ago, and it has real all dark ebony fretboard and bridge, something not even all new USA Taylor’s have,I am not selling it, and it sounds great of course
Alamo Music always has great and informative videos! Kudos to them. I’d been worried about tariffs on musical instruments since Trump started his campaign. Now that he’ll be in office, I have acquired a few instruments and accessories I might have otherwise waited for awhile to buy. If you’re in the market for a guitar, probably not a bad idea to go ahead and get it now ahead of any Trump tariffs . . .
Had to read the title of this video a few times to make sure I was reading it right. Great explanation. It’s unfortunate people didn’t inform themselves enough before making decisions.
Man, bless y'all. You have put more thought and care into this video than many of our representatives did the policy that inspired it. It's almost like 23 Nobel-Prize-winning economists said that this economic policy would do the opposite of curbing inflation, but what do they know?! 🤪 Thank you for using your platform to educate. I hope they decide to abandon this policy altogether. Either way, the next time I'm in San Antonio I'm buying a guitar from Alamo Music.
Great overview - thanks for taking the time to do this! Just a few thoughts to throw into the loop that may or may not be of interest: 1. President Elect Trump has said '25% tariff on goods coming from China.' Personally I see that as an opening gambit in negotiations, which will occur . . . it may be less. 2. My guess is that initially the Gov't will be briefed to go after cars and electronic stuff - will guitars come into the firing line? Who knows. 3. I'm no expert on foreign taxes etc. but I reckon if Gibson & Fender (and other guitar / musical instrument makes with plants in China) got their heads together they could make a strong case for exemption (as could any other number of companies - toys for goodness sake!). (a) To manufacture an 'Inspired by Gibson' Epiphone Les Paul in USA will cost MORE than making one in China. OK - we know that, and it could be the end of Epiphone! (I doubt it will come to that). But . . . (b) Given that Epiphone / Gretsch and other guitar companies are American, the imposition of a high tariff on their goods MIC could adversely affect the companies to the point whereby they need to close or drastically reduce the scale of their China operations. This would adversely affect their sales worldwide . . . and given that a certain % of income / profit on worldwide sales comes directly back to 'Head Office' in USA and the US 'parent' then pays tax on that to the Gov't then the US Gov't will be missing out on $$ by crippling the efforts of Epiphone etc. to sell guitars worldwide. This is where the lobbyists can pitch their case! Time to get the popcorn out, then 😅
I appreciate you trying to explain this in as neutral a way as possible but I think there are 2 big things you missed. 1) Tariffs can greatly impact availability of some goods (most likely fx, synths, pro audio, and 2) consumers now have greater ability to purchase goods from other markets like Temu so if you appreciate local music stores it will be even more important to support them. Thx.
At what point do we take into consideration the extremely poor working conditions these "affordable" guitars are built under? I know RUclipsrs and their viewers swoon over these $120 tele and strat clones while completely disregarding the fact these insturments are built with quasi slave labor. It's also not like there will suddenly be a shortage of instruments if prices increase on imported clones. You can get a used Squier for the same price as a new Harley Benton on Facebook Marketplace. I'm not oblivious to the fact that this will impact brick and mortar stores who are already competing with online retailers, but maybe now would be a good time to start loading up on used inventory to resell later.
OR loading up on Imported inventory BEFORE the Tariffs hit and then speciously RAISE the price when the Tariffs kick in using them as the excuse for the increase. Cash Flow management is the key here. :)
It's not my responsibility that another country has poor labor laws. The american people died for their rights. Maybe those other citizens fight for theirs.
I knew tariffs were coming. I figured prices would go up $50 to 100 on guitars $400 to $850. I bought my Gretsch G5230T now before the price go up to $650 - $700.
What wasn't mentioned - guitars from china *already* have an import duty (not a tariff) attached to them . Any guitar $800 or more coming from China incurs an 8.7% import duty. The proposed tariff of 25% would be on top of that import duty. This probably won't hurt the big suppliers, but excellent niche builders like HsienMo might see their sales materially impacted.
The price increases since the pandemic are not only fueled by increase in production cost, but also by greed. Unlike the older guitarists who on average own something like 5 guitars, the newer generation will only own 1 or 2. They're already used to renting, subbing and not owning. I don't think the amount of guitar players is going to substantially increase in the long term, as many who picked it up during the pandemic will or have already quit. Guitar sales are already down with the crazy price increases, tariff or not.
It’s a matter of semantics, but where you say lobbyists in Washington talk to congressmen, I would say they legally bribe them. Talk has limited impact. Campaign donations have significant influence.
Somewhere on an internet message board a Gibson purist is explaining how tariff level impacts tone.
😁
Dude. Thats genius
It does. American workers will actually make better guitars knowing that the country and its citizens have their backs and that they don't have to compete with cheap crap made by blind children in a country where only elite has actually ever heard rock music. God bless the USA.
Ok, that’s funny…😂🏆
@@oggyman123This take is actually on crack
Good on you, Chris. You are the first guitar RUclipsr I've seen who has addressed this issue. I knew a fair amount, but I learned a lot from your even handed presentation
Kind of crazy that one of the best explanations of how tariffs work came from a music stores RUclips channel
It is a good explanation. But the fact this isn't common knowledge... especially before the election says a lot about our country.
So we as Americans can't make stuff ?
Wow ... This guy sounds so defeated .
@@santosmadrigal3702 Nobody said that. What you going on about?
@@santosmadrigal3702 He never said we can't make things. It is economics and the question is "are people ready or able to pay the price increase?" The build out of manufacturing that would be needed to fulfill the myth would most likely take decades and all that time we would be paying higher and higher prices. It will never again be the 1950's and for people who believe so, well ask those horse and buggy builders and whip makers how it worked out for them after cars took over.
@@urdrwho1 so your OK with shipping all American jobs to forgin county's . The Amish make all their goods at home . The Amish's products are quality . Ain't no illegal immigrants in their farms . Next time you drive past an Amish community see what you can see . ( 50's horse and buggy) Get off your cellphone , and build stuff .
I did not have 'Local Music Store Has To Explain To US Voters How Tariffs Work' on my 2024 bingo card, but here we are...
probably should have done it a month or two ago, but what do I know :|
Agree but would that have made a difference? I doubt it.
@@Cousin_Gregg I don't think it would have. Most of the people who don't know how a tariff works have absolutely no inclination to learn about it. They just have a blind faith that it's a good thing because a person they like suggested it.
It's common sense. You shouldn't need to be told. I didn't. I'm just here to hear AMC's take.
I'm sure you'll find this same video for every profession and hobby right now.
We've had the same effect in the UK. People wanted greater 'sovereignty' from Europe. What they actually got was higher prices for loads of stuff.
@@Tijuanabillwere special right?
@@Tijuanabill You really haven’t thought this through.
The reason products are cheap to buy is because they are cheap imports. If Trump Tariffs mean those products are too expensive for companies to bother importing, Americans are just left with the expensive products made in America.
American companies will now have no foreign competition and can jack up prices.
For a population complaining about the high prices of goods, tariffs are the exact opposite of what you would do in order to reduce prices.
Well done, Trump voters. 🤦♂️
@@Tijuanabill but, that will depend on so many factors…if Trump goes full bore on tariffs then the entire economy will suffer. Many US made products rely on China for raw materials and parts. Personally I think he pulls back if he sees if will hurt us..
Brexit = 4% drop in standard of living in UK. Look for same in US with economic isolation and trade wars. Everyone loses in a trade war except the politicians who brought it on.
@@Tijuanabill 🤦♂️😂
Much of America’s imported foods are from Mexico and Canada. There are currently zero tariffs on those because of the free trade agreement, but Trump has said he wants to impose a 25% tariff on Mexican and Canadian goods. So, good luck buying cheap groceries next year.
You’re also incorrect that every single American product sold outside America has a tariff on it.
And if there was free trade between America and every other single country, America would absolutely not dominate it because your cost of labour and production are significantly higher than the majority of countries on earth, making your products far more expensive.
I mean, Jesus, dude, you’re on a guitar channel. Have you never figured out why guitars made in Mexico are much cheaper to buy than the guitars made in America, even though there’s a very little difference in actual quality?
Thanks for having the cahones to do this
It's actually "cojones."
Thanks for this important update. I have a degree in marketing and have seen how most Americans do not have a clear understanding of basic economic principles.
That's only one of many reflections on the fact that not much is taught in public schools, for the last 20yrs, anyway...Not much with any relevancy to everyday life...
Yeah, the guy says a lot of things that are easily proven false. We’re not at the point yet where we should be taking any of it seriously enough to worry about.
Chris, you could do an economics for dummies channel. You explained this really well. I worked in international trade for years
No, he didn’t explain it well. It’s all one sided without regards to the rest of the dynamics that cause prices to go up and down.
@@wallofrock6725 It's a 13 min video dude. He can't explain Global economic stressors and variables to everyone. But hey, start your own channel and go for it. I'd tune in.
He explained nothing. Of course to a dummy it sounds impressive.
@@thisistimwoods are you boosted?
@@wallofrock6725 It's not one sided, it is basic eco 101 on how tariffs work. Importers pay, then we pay and the country of origin never, ever, never paid. Ya get that!
What a lot of people don’t realize is that a 25% tariff doesn’t result in a 25% price increase. Profit is based on margins so whatever margin applies to the cost of the guitar also applies to the tariff. So, if you have a product with a 100% markup a 25% tariff will turn into a 50% price increase by the time it reaches the consumer
Tariffs are based on the declared value of a product. So if an Amazon guitar costs $100 and you want a 50 margin the sell is $200. If you add a 25% tariff, the cost goes up to $125.00 which changes the sell to $250. Most items have a perceived value so Amazon may decide to accept a lower margin to maintain sales and sell it for $212.50. Or the likely outcome is Quid Pro Quo and they make a deal since the other option is to move production to another country not affected by tariffs.
@ 50% margin doesn’t double the cost; a 100% margin does.
That said, after the distributor has added a margin, the retailer will then ad another margin which, again, includes the tariff in the cost. A 25% tariff will in no way still be 25% by the time it reaches the customer.
What you present is a study in math. If your stock price drops 50% from one dollar to fifty cents. How much of a percentage does that stock need to rise to get back to $1.00. You would be amazed at how many people answer 50%.
Damn
Every step of the way, sellers are going to use the same markup they do now. Most consumer products get a 100% markup by retailers. There are markups at the wholesale level. AMERICANS are going to pay.
This is the a global version of the 1983 Memorandom on Heavyweight Motorcycle Imports enacted by Pres Reagan Administration to save Harley Davidson from bankruptcy. It was put on any bike over 700cc which is what caused the growth of all 600cc and 650cc motorcycle production mainly from the Japanese mfrs but included all imports. Prices went up for everybody and everybody just paid more to ride.
And Harley became HUGE, so instead of "competing" more fairly, they just jacked up THEIR prices along with the others, and it's a never ending cycle, with the large, greedy corporations (and the government) being the only winners with tariffs.
@@RussReiterMusic Exactly why no one rides anymore and why Harley is pretty much loathed by most Americans now, they price gouged their self right out of business within a few more short years.
@@StratocasterHemiI would hardly say Harley is hated by Americans. They seem to have a very successful t-shirt company.
@ lol! Yeah, the T-shirts are at least affordable. but they market the 28k sportster or 38k soft tails to the boomer/genx grey beards who have all the money but can’t even hold the bikes up anymore and aging out, they literally lost the next 3 generations who despise them, Harley is done and thats what greed did.
@@StratocasterHemi Yep
This post deserves a wider audience than guitarists. Thanks, man. I will also say that even if guitar manufacturing or anything else for that matter was on-shored to the USA, it would take us years, perhaps decades to catch up to current international levels. As the Stones said, “You can’t come back and be first in line.” Yes, the USA still makes great guitars but manufacturing in general? The USA will need to dig deep for the motivation and commitment to make it happen. It’s a long term proposition in a land concerned more with the moment.
People who unironically call PRS' dentist and lawyer guitars are finally waking up to the fact that maybe executives dont deserve so much wealth in comparison. These same people think Musk deserves a 100B pay package because "he's a genius" are honestly just ignorant fools
Fender, Gibson, and lots of boutique builders cater to the hedge-fund trade. Custom Shop is code for "overpriced oatmeal". Not saying they aren't quality instruments but they aren't anything special, either. Like ears of corn, just cranked out by the thousands. Do they really sell them all? Or most people just buy a Vintera MIM or an Epiphone from China? Or now the budget lines are made in Indonesia. What's next?
People in high places have assured me that China will pay for the tariffs (you know, like Mexico paid for that wall)....Maybe its time for Paul Reed Smith to make a pilgrimage to Mar a Lago.
So why then did Biden not only KEEP the tariffs to China he Increased the tariffs?
Do some thinking.
Turn off the TV... the rest of the world has
Figure it out... the rest of the world has
These people in high places are simply wrong the tarrif is paid by the American importer at US customs, which they will then have to pass on to the consumer in order to make a profit. Plain and simple. The only effect this would have on China is that the American importers may be more reluctant to buy the product in the first place, leading to shortages for the consumer.
@@stephenmarsden5379 Thanks for the masterclass in missing the sarcasm.
@@jasonpollock9259yeah that was funny to see. He must be American. :-)
It's amazing how many people don't understand this concept. A tariff is a tax on goods. The money comes out of your pocket and goes into the governments pocket.
Either Trump himself really believes that China, Mexico and Canada will be paying the tariffs, or he is straight up lying to the American public. Both are endlessly believable.
When the president elect doesnt understand it, how could the voters understand it?
Bring back USA JOBS
And that's supposed to help inflation?
@@farrl It's not gonna happen.
Excellent to the point explanation of the tariff situation. I suggest this video be played on MSNBC , CNN, and FOX NEWS so everyone ( a lot of folks, anyway) gets a proper view of the coming (?) possibilities. Good civic work Chris!
Very few people trust msm anymore. Putting it on Joe Rogan would get more attention
Well done! A concise,accurate and rational explanation of how tariffs work.
The people most likely to suffer the greatest for tariffs are the ones the least able to bear the cost of them.
Manufacturering isnt coming back to the US. The current tarriffs are already raising prices. Over the past 4 years, imports from countries like Mexico, Vietnam, and Thailand have increased. The problem is the parts those products are made out of still come from China. So instead of those parts being assembled into a final product in China, they get shipped to other countries before being assembled and shipped again to the US. US consumers pay for the Vietnamese, Mexican, and Thai third party handling.
Agreed
It may not be coming back to the US but a lot of it will be moving out of China. Expect a lot more guitars coming out of Indonesia, India, and Vietnam.
@ true, I personally try to buy American made gear as often as possible. Mainly guitars. I don’t mind spending more on a guitar even if it means I’ll have less guitars overall…sounds crazy I know😃
Why wouldn't they do this by subsidizing US companies to compete below the import goods and transform the economy to USA built?
Well that will put MIM fenders as much as US. I bet fender even jacks up the US made.
But on the bright side, we'll perhaps see Gibsons actually costing less than Fenders. I don't mind.
@@stanlee-eq7lu pretty sure Gibson will see it as another reason to jack their prices up even more, they certainly don’t seem to care about being an affordable option
It happened with US steel when Trump tariffed Chinese steel. It’s all going up
It's going to be a greed fest. The consumer will pay and suffer.
Of course, one way or another they may even "spread" the Tariff costs over BOTH so as not to appear greedy.
Also to be considered: imposing tariffs may start a trade war where a retaliating country could:
(1) subject US exports to counter-tariffs (thereby diminishing foreign demand for US goods and lowering US employment), and
(2) heavily tax or just ban exports to the US of goods that the US does not produce but needs (like some minerals), making these goods painfully expensive to buy (or unavailable like China just did for key rare earth minerals).
That said, Chris is right: it will be a quid pro quo between negotiators where the apparent weakness of a party can be compensated by the careful political targeting of retaliatory tariffs.
In the end, it's often ends up as a zero-sum bully game that ends up hurting workers and consumers on both sides.
Correct. If you’re not already an Econ nerd, but want to read some fun history, Google “Smoot-Harley Tariff.” That was an early time when the “America First” slogan was championed. It led to the opposite effect of what it was intended to do; raising prices for consumers and sparking a trade war, which led to less U.S. exports (leading to American job losses). I’m not suggesting that Trump’s tariff policy would lead to another Great Depression, but the Smoot-Hadley Tariffs played a role in causing the Depression. Fun times. Buy your guitars now before the price hikes come next year.
So the US loses the battle because we lack a manufacturing base large enough to pick up the slack. In the next 10-15 years China will be the world’s largest economy..unfortunately
No one wins in a trade war, and tariffs have never lowered the prices paid by consumers. Ever. Can you say inflationary? Well that's where we're headed.
Somebody needs to tell Epiphone. They are not getting hit with tariffs and their guitars have gotten stupid expensive.
great discussion; please do a followup in 3-6 months to discuss what happened to music equipment prices!
Haters will call this fake news but kudos to Alamo for being bold enough to set the record straight.
America failed an open book test.
so what did he said exactly, what record has been set straight? Same as him, you didn't say anything, just word salad. The answer to the question in the title of this video is simple - nobody knows. It's that simple. But the majority of US has voted for this, so you'll have to put up with it or leave.
@ what did he “said” 😂 sit this one out, buddy
@@oggyman123If you don’t understand what he said, you could watch again and try to understand.
@oggyman123 literally, everyone with a brain knows exactly what will happen. This is not Little Donny's first time starting a disastrous and pointless trade war.
Don't really get the bold part. A lot of this could happen without addressing specifics or saying this is what we think will happen. The one thing that was correct is quid pro quo. A perfect example were the Canadian dairy tariffs. The Canadian government was subsidizing their dairy farmers allowing them to sell their products in the US at artificially low prices while also limiting access to Canadian markets for American dairy products. Quid pro quo could also come into effect with Mexico due to political issues that affect the US.
You're comment about America failing an open book test means you don't get it and why Trump won both the popular vote and Electoral college. .
"Tariff is the most beautiful word in the dictionary." -Don John, the Orange Clown
Nicely presented. Not mentioned here was the labor market in the US. Almost Every single area of our job market is scrambling for employees and cannot fill positions. After tariffs kick in, Americans are not going to benefit at all with more jobs if no one is there to work them right now in the first place. Food, guitars, everything!, will go up in price.
Don’t forget that tariff tax increases the starting price. Then there’s sales tax on top of the increased cost. It’s the gift that keeps on giving.
better economics lesson than anyone in the texas public school system will ever receive
Or in the Texas private school system either.
Read you loud and clear! Start buying stuff now!
@kstritt 🎅 🧝 🦌 Good call. 😎
I have been👍
If the US slaps tariffs on imported guitars, other countries will respond with slapping tariffs on US made guitars. So the export of 'US-made' guitars is likely to suffer intuit scenario.
Well navigated. I don’t blame you for not mentioning them but there some other factors involved here. One would be the effect of reciprocity on goods being exported out of the US to countries affected by American tariffs. That will hurt all manner of businesses in a global economy. For example, farmers needed a bailout the last time Trump put tariffs on Chinese goods. The agricultural industry got hammered when China was no longer buying our crops. Two, tariffs have never LOWERED the cost of ANYTHING. Generally businesses try to find best prices for inputs. If they have to go elsewhere it’ll cost more. Period. This may or may not apply to the guitar market but across the economy CEO’s are making around 300 times what the average employee earns. In 1965 it was 65:1. CEO pay is up 1300% since 1978. Workers wages have risen only 18%. Trillions of dollars have been transferred from the middle class to the top 1%. We SHOULD have the money to buy American but we’re just not keeping up over time.
Agreed. I’m not one to say how much someone can make, but CEO pay has gotten a little out of hand, to put it mildly. If you have a strong middle class, you have more people with larger amounts of disposable income, and the economic wheel can more easily turn. If you have a bunch of people who are strapped for cash, they’ll be less likely to buy stuff, which means less reason to manufacturer goods or hire service staff, etc. and you end up with a downward spiral. If CEO pay was cut (but still really great for the CEOs) and companies had more money for raises, or bonuses, or if you want to argue that U.S. companies need to be more innovative, then fine… more money for R&D, that would seem to be more sensible for everyone. I’m not trying to get political here, but it’s strange to think why someone would vote for someone who has told you straight up that they favor policies that are against your own economic self-interest is behind me. I suppose some folks have principals/social issues that are more important to them than their bank account/retirement savings. To each their own.
Not likely to improve soon. Trump’s incoming cabinet is estimated to have a net worth of 300 billion. Billionaires are not about fairness or altruism or concern for others. They are about making MORE for themselves. How else would they become billionaires?
Well said
The incoming tax changes will allow the 1% to hoard even more. But people wanted it, I guess.
And those farmers voted for him again because “hey we got bailed out last time!”
In history, the UK tariffs on US goods in retaliation for the US holding the UK to the Lend Lease agreement following WWII led to the Beatles using Vox early in their playing. What would most likely hit the US musical instrument market would be tariffs on Canadian oil, which would raise the cost of transportation aka how much sweetwater and G Centers "free shipping" increased the price of guitars etc.
Tariffs are taxes by definition and taxes get PASSED ON to the consumer! In extreme cases tariffs can start trade wars!
Excellent presentation! There is also an increased overhead cost to the retailer in maintain a "stock" inventory. This may or may not involve additional taxes on inventory or other operating costs.
something to also consider - the expectation of a price increase is the catalyst of more activity in the marketplace. so whether or not there is an actual tariff on something, more demand could also increase the cost of things organically. aka inflation
I'll be holding off on purchasing any guitars if/when this tariff nonsense actually happens. Hopefully it's a bunch of bluster (as usual), but I guess if it happens, it'll give me 4-6 years to save for an ES-335 while the economy eventually recovers from what these imbeciles in power claim they want to do.
Honestly, I would just buy the ES-335 now. You'll be able to enjoy it while waiting for this shitstorm to pass.
Thank you for speaking truth. I only wish more retailers were proactive than reactive and spoke out before the election. Anyone who doesn't think we're going to pay for these tariffs is highly uninformed or living in denial.
fun fact, I was wondering exactly those questions some weeks ago. Thanks to answer it ! Cheers from France.
Taking guitars as an example, tariffs aren't really needed to "bring manufacturing back to the US. Gibson and Fender and PRS (just examples) already manufacture here in the US. Those instruments are perceived as higher quality, and command higher prices (partly due to that perception, but largely due to labor costs). Raiing the price of an Epiphone or a Squier would not cause me to buy a Gibson or a Fender if I cannot afford them currently. So I am not sure that these companies will be targets of tariffs, unless our gov't just doesn't know what they are doing... oh ...wait a minute...
That was a very commendable presentation. As someone noted, there are other factors. But you covered the gist of the situation. The main question will be if the American public will be willing to pay more for an American made product. Voting wise, they said yes because Trump was elected. But only the future will tell if the public will accept higher prices. 😮
History says no. That's how we got here to begin with. The biggest question is whether we are going to see real improvements when it comes to employment numbers and the federal economy.
Good and to-the-point explanation for those that need to hear it. RIP to your comment section though.
FYI The Tea Party was not about Tariffs. It was about the king ending the Massachusetts Bay Colony Charter. The colonists wanted laws to be about the king and representation. The king reacted by adding more taxes after the tea party.
Nice summary. So, if potentially a lot of prices will go up - especially with additional general tariffs applied across the board - what will that do to the inflation rate? 🤔
It will raise it of course.
@@svenklabunde it’s as if no one has ever thought about it before. FAFO
Those of us living abroad and who frequently buy gear from the US and elsewhere are all too familiar with this. You have to pay customs duties (and VAT) when you pick it up at the post office, and good luck telling the lady behind the window to chase down the seller for the customs portion.
Now, if this comes to pass, what *might* happen is that overseas manufacturers lower their own prices to some extent to offset the tariff so they remain competitive, but with net profit margins in most industries typically less than 10%, there's not much wriggle room for them to do that.
A friend of mine owns a manufacturing company in China. He said the USA accounts for about 4% of his sales and he couldn't care less about the tariffs. Tariffs cost him nothing and he won't make any changes. I would guess that a lot of manufactures in China feel the same.
@@NotExpatJoewhat the he’ll does your made up “friend” story have to do with anything? Your picture shows me that you’re not very well educated.
@@chadcoady9025 Mi ken ala wile toki e ni: sina pakala e tenpo suli sina tan ni kepeken toki li kama tan mi.
Being up here in Canada, time to buy more Canadian made instruments made with local wood. Imports prices from Asia will likely drop here because of a glut of instruments not being sold in the States. Maybe this will be a great time to buy in the coming years. Only time will tell.
All Godin lines, Norman, Seagull, Simon Patrick, all very good guitars, and let's not forget the Godin Alex Lifeson Limited Edition LERXST, all made in Canada, buy now before the TARIFFS hit
Good points. Question: why is the postage/shipping from Canada so darn high? I mean it's like $40 for a pedal, $200 for a guitar... Insane. It's more than AU, Japan, UK, etc. Has kept me from many a buy.
You are right, I as a Canadian find them outrageous but I do not know all the economic facts. Canada post has a giant mandate to deliver mail right across Canada ( the second largest country on earth) with 1/10 the U.S. population. So they are in major dept as things stand, their operating cost must simply be too high.
I.s. rates are good but your dollar is so strong compared to the Canadian that it makes it expensive to buy U.S.
Maybe things will level out in the coming years...let's hope!
@@harveycan5820 Our average minimum wage is $17:30, as per $7:25 in the US, Plus we have really high taxes, 15% in some provinces
The irony…..a Texan explaining how MAGA-nomics are bad for Texans……and the entire country……and basically the entire world economy. A day late and billions of dollars short but thank you for this explanation nonetheless. The fact that more than 50% of the population didn’t understand how tariffs work just proves how poorly educated and ignorant we are. And it’s going to much worse. But at least our children will have the 10 commandments branded onto their brains……..
Exactly. Pretty bad
I live in Austria and don’t know if i should buy the CS Gibson now or in spring as planned. I mean if it’s gonna be a small increase i don’t mind paying more but who knows whats going to happen.
Thank you for talking about this!
Good explanation! However you slice it, we will have uncertainty until we see what actually happens. Meanwhile I've told wife that I have to get my new guitar now!!
There's also some companies that will use the excuse/guise of tariffs to inflate their prices, regardless of whether they are subject to them.
Of course.
When the prices on imported guitars go through the roof, people won't be buying American-made guitars. They'll just stop buying guitars.
Thanks for this video. At the very minimum you have increased awareness that made in “insert nation” really means assembled in said country.
Well explained Chris !!!!
Do the tariffs have to stick to the imported guitars, or could a company like Taylor spread the cost through all of their products to dilute it?
So make every guitar go up? How does that solve anything?
yes, they can spread the cost around which is a viable option for companies like Taylor, Fender and Martin.
@@BobMcc
That’s the whole point. Tariffs don’t solve anything when we impose them on countries we already have a good, established, trade relationship with such as our neighbors to the north and the south.
@@larryh7202 how does that help the American people in any way shape or form?
@ well he said he was going to impose tariffs on them as well to pay for “tax cuts” even though he personally negotiated the “greatest deal ever” with them via the USMCA. Guess it wasn’t so great after all.
Plain and simple, tariffs are not a tax on Mexico and China, they are a tax on the US consumer. If you voted for Trump, you voted for higher prices...well done!
He always says he loves the uneducated!
Trypical Democrat voter logic. You rather have them tax your whole income than put tariffs on goods that you probably won’t buy.
They're leverage and they seem to be already working with puny Trudeau.
@@gnrfront probably won't buy? Did you miss the topic?
@@gnrfront Typical conservative ignorance. A strong confident statement that is wrong and shows a lack of knowledge and understanding.
Great explanation!
just bought a new yamaha guitar to avoid higher cost expected
smart move
But you didn't buy a USA-made guitar which would help our economy & jobs market. The tariff didn't work to help in that way. No blame, and I'm sure many are doing the same thing. But it's yet another blunt MAGA instrument that doesn't accomplish anything good for Americans. Like "banning abortion" leads to complex crises in reproductive care and higher maternal & infant mortality rates. Slogans aren't science. Tariffs are not snake-oil magical solutions.
I just bought my A3M today. It still doesn't make sense to me. Even if the tariffs make the guitar cost $1,125, I'm still not going to buy a D-18
Thanks for the straight info.
The USA consumer love their sweat shop made products.
i think it's safe to say that the prices aren't going to go down.
Ohhh yes they will because the demand for guitars are shrinking everyday as the grey beard boomers and genx die off or age out of the hobby, no new generations to fill the void, and prices will continue to fall steadily as the supply overwhelmingly crushes the demand. It’s Already happening.
It's not just the price of finished goods. It also affects raw materials. How many US made guitars use Canadian maple?
Excelleny overview. One Important thing you didn't cover that I'd like to add to folks skimming the commemts is that even on an idealized purely Made In USA good, if the international competition is made more expensive, that price then acts as a higher boundary by which a USA manufacturer can increase its prices while still be effectively cheaper than the international good. Just another way tariffs can cause prices to go up across the board.
Best explaining ever, thank you Chris!!!
The thing that is often forgotten is for example your car breaks down and the parts for the repair cost $100 more. That becomes $100 you don't have buy any gear. Add to that that $200 import guitar is $250 and if you now still want it you have come up with $150 more than pre-tariffs.
Then you have those that lose their job making an American car because the parts are imported and you have decided to take the bus. In short everyone is the loser. When the stock market crashed in 1928. It took a few years to have 5% lose their job. They applied tariffs and soon 20% lost their jobs.
Then there is the guy that makes heavy machinery who loses his job because China puts a tariff on American made machinery in retaliation.
Pretty fair presentation, steering clear of the political aspects of tariffs. An important thing to note is that the goal with a tariff is NOT always to artificially protect domestic manufacturing. Those who support a given tariff understand that it will increase costs to the end-user, but see that as an acceptable cost of addressing larger issues, like national security, human rights abuses, patent/copyright infringement, or other "bad" behavior.
Sectored tariffs are not what was promised. Mass tariffs on ALL imports for Mexico, China and Canada to be clear.
The Tariffs could just be a threat to get these countries to do what they should be doing in the first place.
Sell to russia instead?
Like paying for the wall? How did that work out. 😂
Excellent update. Thanks Chris.
Canadians just remembering a time where we could cross the border with a smile and driver's license. Now we're threatening to turn the lights out in Michigan. What a world!
Here’s something that I don’t understand, perhaps it has something to do with tariffs.
- boss katana amp, a Japanese brand made in Malaysia.
- boss katana amp retail price in Malaysia is higher than in Europe
- boss katana amp retail price in Europe is higher than the states
How is it something made in Malaysia gets sold in Malaysia at a higher retail price than Europe and the states?
Tariffs = Negotiation strategy to alleviate those placed on us.
Excellent information. Thank you. 🤗
Excellent explanation, thanks!
Thank you for the information..
The other impacts even for American made goods are Tariffs on the component parts that are not manufactured in the USA, also the other one that no one is talking about that is likely to happen is the volume that the USA companies make are likely to fall as the export markets retaliate with counter tariffs so that will make the goods in America more expensive. The other likely impact is for Companies like Martin , Fender, and Taylor who have Mexican operations , they are likely to shift production from the USA to Mexico to serve the rest of the world.
I got a MIM Taylor 114e for $630 from Guitar Center some years ago, and it has real all dark ebony fretboard and bridge, something not even all new USA Taylor’s have,I am not selling it, and it sounds great of course
Chris, you could teach college level economics...very well explained!!!!
Thanks for sharing this!
Alamo Music always has great and informative videos! Kudos to them. I’d been worried about tariffs on musical instruments since Trump started his campaign. Now that he’ll be in office, I have acquired a few instruments and accessories I might have otherwise waited for awhile to buy. If you’re in the market for a guitar, probably not a bad idea to go ahead and get it now ahead of any Trump tariffs . . .
Had to read the title of this video a few times to make sure I was reading it right. Great explanation. It’s unfortunate people didn’t inform themselves enough before making decisions.
Man, bless y'all. You have put more thought and care into this video than many of our representatives did the policy that inspired it. It's almost like 23 Nobel-Prize-winning economists said that this economic policy would do the opposite of curbing inflation, but what do they know?! 🤪
Thank you for using your platform to educate. I hope they decide to abandon this policy altogether. Either way, the next time I'm in San Antonio I'm buying a guitar from Alamo Music.
very well done. I wish you would've done this three months ago. Knowledge is power, but I'm not sure it would've made any difference
I have a Strat, 335, Les Paul,Telecaster, And an Alvarez A acoustic. I think I am set
Very well explained.
One solution. Buy it now. I’m sure Chris would agree. Great talk.
Very well presented!
Great overview - thanks for taking the time to do this! Just a few thoughts to throw into the loop that may or may not be of interest:
1. President Elect Trump has said '25% tariff on goods coming from China.' Personally I see that as an opening gambit in negotiations, which will occur . . . it may be less.
2. My guess is that initially the Gov't will be briefed to go after cars and electronic stuff - will guitars come into the firing line? Who knows.
3. I'm no expert on foreign taxes etc. but I reckon if Gibson & Fender (and other guitar / musical instrument makes with plants in China) got their heads together they could make a strong case for exemption (as could any other number of companies - toys for goodness sake!).
(a) To manufacture an 'Inspired by Gibson' Epiphone Les Paul in USA will cost MORE than making one in China. OK - we know that, and it could be the end of Epiphone! (I doubt it will come to that). But . . .
(b) Given that Epiphone / Gretsch and other guitar companies are American, the imposition of a high tariff on their goods MIC could adversely affect the companies to the point whereby they need to close or drastically reduce the scale of their China operations. This would adversely affect their sales worldwide . . . and given that a certain % of income / profit on worldwide sales comes directly back to 'Head Office' in USA and the US 'parent' then pays tax on that to the Gov't then the US Gov't will be missing out on $$ by crippling the efforts of Epiphone etc. to sell guitars worldwide. This is where the lobbyists can pitch their case!
Time to get the popcorn out, then 😅
"opening gambit in negotiations" Finally, someone with a little thought and nuance. Well said.
Great information I think the end game is to have equal tariff values on both sides.
I appreciate you trying to explain this in as neutral a way as possible but I think there are 2 big things you missed. 1) Tariffs can greatly impact availability of some goods (most likely fx, synths, pro audio, and 2) consumers now have greater ability to purchase goods from other markets like Temu so if you appreciate local music stores it will be even more important to support them. Thx.
I thought Fenders plant was in Ensenada Mexico? Doest it say that on the back?
At what point do we take into consideration the extremely poor working conditions these "affordable" guitars are built under? I know RUclipsrs and their viewers swoon over these $120 tele and strat clones while completely disregarding the fact these insturments are built with quasi slave labor. It's also not like there will suddenly be a shortage of instruments if prices increase on imported clones. You can get a used Squier for the same price as a new Harley Benton on Facebook Marketplace. I'm not oblivious to the fact that this will impact brick and mortar stores who are already competing with online retailers, but maybe now would be a good time to start loading up on used inventory to resell later.
OR loading up on Imported inventory BEFORE the Tariffs hit and then speciously RAISE the price when the Tariffs kick in using them as the excuse for the increase. Cash Flow management is the key here. :)
It's not my responsibility that another country has poor labor laws. The american people died for their rights. Maybe those other citizens fight for theirs.
Proud owner of a bought, and paid for collection of 29 guitars. Glad I got them while the getting was good. Rock on y’all 🎸🎸🎸.
Come on, make it nice even 30.
Thanks for the info Chris. 🎸
I knew tariffs were coming. I figured prices would go up $50 to 100 on guitars $400 to $850. I bought my Gretsch G5230T now before the price go up to $650 - $700.
Chris, that is explained perfectly. Thanks
What wasn't mentioned - guitars from china *already* have an import duty (not a tariff) attached to them . Any guitar $800 or more coming from China incurs an 8.7% import duty. The proposed tariff of 25% would be on top of that import duty. This probably won't hurt the big suppliers, but excellent niche builders like HsienMo might see their sales materially impacted.
I wonder how Vanderlay industries will deal with this?
I am happy that Sandberg is here in Europe
The price increases since the pandemic are not only fueled by increase in production cost, but also by greed. Unlike the older guitarists who on average own something like 5 guitars, the newer generation will only own 1 or 2. They're already used to renting, subbing and not owning. I don't think the amount of guitar players is going to substantially increase in the long term, as many who picked it up during the pandemic will or have already quit. Guitar sales are already down with the crazy price increases, tariff or not.
It’s a matter of semantics, but where you say lobbyists in Washington talk to congressmen, I would say they legally bribe them. Talk has limited impact. Campaign donations have significant influence.
Really good video. Thank you
yeah buddy. better buckle up, put your tray table and seat in the upright and locked position.