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Aumento Aranceles China PDF
Aumento Aranceles China PDF
THE ESCALATING TRADE BATTLE ernment apparently reneged on previ- had a landed value of $979.1 million in
between the U.S. and China threatens to ously agreed upon terms that loosened 2018, as the accompanying chart illus-
impose a 25% tariff on Chinese imports import restrictions and liberalized for- trates, accounting for 49% of the U.S.
of music and audio products that eign investment rules. U.S. trade nego- industry’s total imports. Retail selling
account for close to 40% of the indus- tiators then stipulated that absent the prices based on the landed value of
try’s U.S. retail revenue. The higher signing of a new trade agreement, the imports suggest that these Chinese
duties are set to go into effect July 6, 25% tariff would be applied to an addi- imports produced $2.9 billion in rev-
unless U.S. and Chinese negotiators can tional $300 billion of Chinese imports enue for the retail channel, or 39% of
break the impasse with a new trade pact. that includes virtually all musical instru- the retail value of all music products.
The Trump Administration imposed a ments, audio electronics, and loud- The market share of Chinese imports
25% tariff on $200 billion of Chinese speakers. varies significantly among different
imports in May after the Chinese gov- Music and audio imports from China product categories. 99% of portable
keyboard imports under $150 originated
from China, whereas Chinese-made
How Important Are Chinese Imports? cymbals represented just 8.6% of total
2018 Landed 2018 Landed Chinese Share imports. With tariffs applied to the land-
Value Of Value Of Of Total U.S. ed value of an imported product, rather
Chinese Imports Total Imports Imports
than the wholesale or retail price, con-
Acoustics Guitars (Over $299) $13,811,377 $71,699,165 19.2% sumers are unlikely to see the full 25%
Acoustics Guitars (Under $299) $35,061,466 $50,429,016 69.5% price hike at the point of purchase.
Brasswinds $30,762,810 $81,850,468 37.5% Retailers and suppliers surveyed have
Clarinets $7,825,698 $31,746,029 24.6% indicated that they would sacrifice mar-
Cymbals $1,767,380 $20,523,771 8.6% gin points to moderate any price
Drums $34,314,327 $51,000,000 67.2% increases. However, if tariffs are imple-
Effects Pedals $16,431,814 $43,313,093 37.9% mented, retail prices are headed for a
Electric Guitars $66,376,579 $204,156,892 32.5%
significant jump.
Flutes $6,164,363 $20,253,331 30.4%
OPINIONS ARE DIVIDED
Harmonicas $4,439,682 $8,832,160 50.2%
Industry opinion on how the resulting
Instrument Cases $48,856,844 $73,511,858 66.4%
prices increases will impact sales is
Instrument Strings $2,153,968 $23,107,010 9.3%
divided. Jon Haber of Alto Music in
Microphones $163,232,238 $373,362,797 43.7%
Middleton New York contends that con-
Pianos (Grand) $9,114,989 $73,759,783 12.3% cerns “are way overblown.” Observing
Pianos (Vertical) $4,847,585 $45,070,841 10.7% customers at his three locations and
Portable Keyboards Over $150 $60,296,707 $125,968,061 47.8% website, he explains, “If a $150 gig bag
Portable Keyboards Under $150 $35,284,851 $35,587,738 99.1% goes up $25, or a $1,000 guitar goes up
Power Amplifiers $64,987,573 $124,370,232 52.2% $150, I don’t think it will make much of
Saxophones $15,686,111 $48,291,133 32.4% a difference.” Chuck Surack, CEO of
Speakers (multiple transducers) $218,816,861 $296,876,023 73.7% Sweetwater, is much less optimistic.
Speakers (single transducer) $72,786,455 $106,365,805 68.4% “Higher prices will depress sales,” he
Synthesizers $26,381,611 $43,372,018 60.8% states. Joe Castronovo, president of
Ukuleles $39,773,147 $46,264,536 85.9% Korg USA, is also concerned about ris-
Total $979,174,436 $1,999,711,760 48.9% ing prices. He states, “I cannot imagine
How Tariffs Would any manufacturer or importer absorbing where it’s pretty easy to switch to a new
Impact Chinese Pricing a 25% cost increase. They have to pass factory in a different country. We’ve
it along. Our industry is pretty resilient, spent years working with our Chinese
Prices reflect the average landed unit but consumers won’t be happy with suppliers to develop the necessary qual-
cost of Chinese imports higher prices and demand will most ity, and to move would be very chal-
likely slow.” lenging and time consuming. We are
Electric Guitars Opinions on the impact of tariffs out- holding on at least for now to our cur-
Canada $753 side the music industry are similarly rent partners in China hoping that the
Japan $450 divided. International Monetary Fund trade war will soon end.”
Korea $307
Mexico $183
analysts say the tariffs will have only a Evaluating new production sites is a
Indonesia $135 “nominal” impact because the $500 bil- time consuming headache for most, but
China (currently) $99 lion in directly affected Chinese prod- John D’Addario III, president of
China (with 25% tariff) $124 ucts constitute just 2.4% of the $21.5 D’Addario, sees a silver lining in the
trillion U.S. economy. Yet, analysts at process. He states, “This migration
China’s price advantage over Indonesia Bloomberg are raising alarms. “Tariffs away from China had already started
shrinks to 7.7% from 27%. Could Cause A Retail Apocalypse,” they before the trade war and now is acceler-
declare, noting that higher prices could ating as a result of it. In the long run, it
Acoustic Guitars further squeeze already slim retail mar- will create more viable suppliers
Japan $913
gins. The absence of consensus extends throughout the APAC region, which
Korea $344
Canada $331 to the political class. Republicans, who should drive down costs in the long
Mexico $234 have historically favored free trade, are run.”
China (currently) $188 cautiously supporting the tariffs, while
China (with 25% tariff) $235 Democrats, who in the past have advo- BRINKSMANSHIP OR STRATEGY?
Indonesia $182 cated for tariffs to “level playing fields” The Chinese government is retaliating
and “protect American jobs,” have been against the U.S. tariffs, raising duties on
Tariff puts Chinese guitars at parity critical. a wide range of U.S. products, including
with Mexican imports and 29% over Difficulty in accurately gauging con- agricultural products and timber. It is
Indonesia. sumer price sensitivity helps explain the also using its position as the leading
differing viewpoints. The buying public supplier of rare-earth minerals, includ-
Saxophones
Japan $2,130 will candidly express its opinions about ing neodymium, to threaten the U.S.
Indonesia $646 product features and design but is far high-tech industry. Neodymium is a
Taiwan $638 less forthcoming when asked “how vital component for semiconductors and
China (currently) $355 much would you pay for it?” Thus, only electric motors. It’s also widely used in
China (with 25% tariff) $444 time will fully reveal the impact of tar- magnets for microphones and loud-
Vietnam $342 iff-related price increases. In the inter- speakers.
im, though, virtually all suppliers are The Trump Administration has shifted
Tariff expands Chinese premium over
exploring an “Anywhere But China”— its stance on trade with China on several
Vietnam to 29.7%.
or ABC–sourcing strategy, reaching out occasions over the past two years, and
Grand Pianos (5-foot) to factories in Indonesia, Malaysia, some observers describe the 25% tariff
Japan $7,961 Vietnam, Mexico, and even the U.S. As threat as more brinksmanship than set-
Indonesia $5,524 the accompanying chart indicates, a tled policy. For some, this uncertainty is
China (currently) $3,075 25% tariff would reduce if not eliminate a bigger problem than the actual tariffs.
China (with 25% tariff) $3,843 China’s competitive edge. Steve Patrino, president of The Music
For some products, like bags and cases, Link, states, “For all industries, the
China’s price advantage over cables, or relatively simple stands, shift- information is constantly changing. Will
Indonesia shrinks to 31% from 45%. ing production sites can be accom- a final trade deal eliminate the newest
plished with little disruption. One siz- 25% tariffs, or keep them permanently?
Molded Plastic Cases able guitar manufacturer reported, Will the additional tariff codes includ-
Mexico $65
Thailand $47 “We’ll stop sourcing the majority of our ing string instruments be added? The
Indonesia $24 cases in China by year end, regardless unsettled nature leaves difficulty in
Taiwan $19 of how the tariffs are implemented.” In planning for your business.”
Vietnam $18 the case of more complex products, Although trade relations with China
India $17 finding new production sites is a major have moved to the forefront in the past
China (currently) $16 challenge. As Sheryl Laukat, CEO of two years, problems have been simmer-
China (with 25% tariff) $21
Cannonball, explains, “Musical instru- ing for close to two decades. The bipar-
Tariff would place Chinese prices
ments with so many moving parts and tisan U.S. Commission on the Theft of
ahead of Indonesia, Taiwan, Vietnam,
complicated craftsmanship can’t be American Intellectual Property esti-
and India.
compared to a hammer or a t-shirt, mates that China is responsible for $600