DIY getting more expensive...

[neildavis]

I started an order at Digikey and kept running into "Tariff eligible" or "Tariff applied". It's a 25% surcharge when applied. "Tariff eligible" means they still have enough existing stock that they haven't had to apply the tariff yet. If you need parts, you might want to buy now before it's 25% more expensive.

This is going to have a big effect on PE products...

[Kornbread]

Is that going to happen on sites like the Bay also?

[ceiol]

and now PE charges sales tax to many states... including Caifornia

[Squidspeak]

I don't think PE has a choice

[a4eaudio]

I don't think PE has a choice with regards to sales tax. I'm in Ohio, so I always had to pay it and its like a 7.5% penalty for buying from PE vs places not in Ohio. I've had stuff shipped to my daughter at college knowing I'd be visiting soon.

With respect to tariffs, that will just depend on PE's competitive position and whether they can pass the tariff on to its customers. It's not only the 25% tariffs on China products imported into the US, but the steel and aluminum tariffs raise the prices of those materials globally and will eventually show up in manufacturer's prices. But who knows how long the tariffs will actually last.

[billfitzmaurice]

The average margin on retail is 40%, out of which the seller has to pay their overhead. No retailer is going to halve that margin by absorbing the tariffs, that's a short path to bankruptcy.

[a4eaudio]

The average margin on retail is 40%, out of which the seller has to pay their overhead. No retailer ...

I wasn't referring to retailers or PE's industry in particular.
But even for retailers, note that if you have a product made in China (and now subject to a 25% tariff) and a nearly perfect substitute for that product made anywhere other than China (and thus the price hasn't changed) the retailer can't raise the price 25% or the sales of that product would go to zero. In this case, the Chinese supplier would have to absorb the tariff or lose all of its sales to the US (of course it could still sell to everywhere else at its old price since only the US has implemented the tariff).

[dst]

This is how tariffs can affect companies large and small, and consumers. I work for a Fortune 500 beverage company. Tariffs on aluminum and steel have added $50 million to our cost of goods in 2019. Yes, $50 million. We are not having a good sales or financial year in 2019. So what happens when the cost of goods increase in a difficult sales environment? Well two weeks ago my employer eliminated 350 white collar positions. My job remained intact, but some good friends lost theirs. Tariff costs were a part of that. 350 white collar positions a year equate to about $50 million. Transportation costs have also risen due to gas prices. So yes, there are affects to this. If you want to buy 100% American made drivers and speaker parts, what are you going to buy? Which crossover components, PCB's, transformers, tubes, DAC chips, ICs, wire, chassis and cabinets come from China? How many of PE's SKU's are manufactured in China? Where are all of PE's "in house" brands manufactured? I would think a lot are made in China. Ultimately, costs of goods increases get passed on to the consumer. So we all are, or will, be paying for these tariffs. No free lunch. For those who truly want a "Nationalist" movement in the U.S., you need to realize that you had better get ready to pay 10 - 20% more for many of your consumer goods. My personal income will be down this year by 10-20%, in part because of tariffs. Whether one likes it or not, DIY speaker building currently is a global endeavor, with much based in China or Asia.

[tedwilt]

Lots of other Asian countries with higher quality than Red China with no tariff. Start supporting Taiwan and others.

[billfitzmaurice]

This is how tariffs can affect companies large and small, and consumers. I work for a Fortune 500 beverage company. Tariffs on aluminum and steel have added $50 million to our cost of goods in 2019. Yes, $50 million. We are not having a good sales or financial year in 2019. So what happens when the cost of goods increase in a difficult sales environment? Well two weeks ago my employer eliminated 350 white collar positions..

+1, that's the reality of tariffs. They don't hurt exporters, they hurt importers, and that's us.

[Sydney]

This is how tariffs can affect companies large and small, and consumers. I work for a Fortune 500 beverage company. Tariffs on aluminum and steel have added $50 million to our cost of goods in 2019. Yes, $50 million. We are not having a good sales or financial year in 2019. So what happens when the cost of goods increase in a difficult sales environment? Well two weeks ago my employer eliminated 350 white collar positions. My job remained intact, but some good friends lost theirs. Tariff costs were a part of that. 350 white collar positions a year equate to about $50 million. Transportation costs have also risen due to gas prices. So yes, there are affects to this. If you want to buy 100% American made drivers and speaker parts, what are you going to buy? Which crossover components, PCB's, transformers, tubes, DAC chips, ICs, wire, chassis and cabinets come from China? How many of PE's SKU's are manufactured in China? Where are all of PE's "in house" brands manufactured? I would think a lot are made in China. Ultimately, costs of goods increases get passed on to the consumer. So we all are, or will, be paying for these tariffs. No free lunch. For those who truly want a "Nationalist" movement in the U.S., you need to realize that you had better get ready to pay 10 - 20% more for many of your consumer goods. My personal income will be down this year by 10-20%, in part because of tariffs. Whether one likes it or not, DIY speaker building currently is a global endeavor, with much based in China or Asia.

This ^ follows early predictions of the consequences of increased costs of Aluminum and Steel. It correlates to the details provided by Bureau of Labor Statistics - US Dept. of Labor

[Navy Guy]

I wasn't referring to retailers or PE's industry in particular. But even for retailers, note that if you have a product made in China (and now subject to a 25% tariff) and a nearly perfect substitute for that product made anywhere other than China (and thus the price hasn't changed) the retailer can't raise the price 25% or the sales of that product would go to zero. In this case, the Chinese supplier would have to absorb the tariff or lose all of its sales to the US (of course it could still sell to everywhere else at its old price since only the US has implemented the tariff).

That’s not really how that works. The substitute can, and usually will raise prices because the other alternative is already 25% higher. The sub could raise 20% and still be a cheaper alternative.

[neildavis]

One of the weird consequences of the tariffs is that it will be harder for the DIY'er to find IC's for hand-assembled projects. I was mostly surprised by the tariff on the ADAU1701 chip at Digikey. That's a part that is designed in the US, fabricated in the US, and then sent to China for assembly, testing and final packaging. But US semiconductor manufacturers are not going to invest in packaging equipment to get around the tariff--they are simply going to accelerate the trend toward flip-chip construction, using the BGA "package" that DIY'ers dread. As long as China offered cheap semiconductor packaging, it made sense to sell chips in conventional packages. But with a 25% tariff on the entire cost of the device, those familiar packages are going to die off. At least, that's my educated guess...

[Navy Guy]

One of the other impacts that not a lot of people think about is that the supply of the cheaper stuff that doesn't have the tariff is naturally lower than the supply of all goods in the market so a lot of products will run into supply constraints. Big companies will gobble up as much as they can at the cheaper price and it will hit small businesses the hardest in the supply chain.

[dst]

To set up a factory to produce a lot of these items takes a massive amount of time and capital. Check on the cost of a computer chip factory, or battery, or speaker. I know small and medium sized businessmen who produce in China as their only true cost and logistic alternative. If they produced here they would not be in business. Try supplying Wal-Mart with an American produced consumer item. WalMart's key objective is to beat you down on price and thereby sell goods at a low cost. Who in America wants to pay $1,000 for a flat screen TV made in in the U.S.A. that currently is made in China and sold here for $600? U.S. soybean farmers are now sitting on 94% of their 2018 production. China isn't buying soy beans from us. Do we bail the farmers out? No one bailing out my colleagues whose jobs were eliminated. Tariffs hurt people. China has 1.5 billion people, they can beat almost anyone on the cost of producing a good. In the end, Americans buy with their pocket book. If the cost of PE's many great performance and affordable drivers go up 20-30% due to tariffs, who will buy them?