How Will Tariffs Effect the Guitar Market

[Stoli]

I am guessing that prices on new guitars will go up unless they move manufacturing to countries that we can work something out with. It sounds like South Korea and Japan want to work something out. I wonder if somebody in the US can can come up with something reasonably priced. I do not intend this to be a political post but it just sounds like we are heading into the unknown for guitar pricing with a complicated issue.

[tobijohn]

I was wondering the same thing. It would take time to move full production to another country with lower tariffs so initially, the price of Chinese guitars would be significantly higher. Even though the tariffs are based on the wholesale price of an item, a 145% tariff on an Epiphone LP Standard assuming the declared wholesale price is 50% of the retail price and if the actual net profit is maintained, would bring the retail price up to around $800 from $650 and $1125 if it's a 245% tariff.

Also, what abut guitars bought directly from Chinese websites? The importer pays the tariff, not the exporter so how will that work?

Regardless, I'm going to assume that increased new pricing will pull up the pricing on used guitars, similar to the used car market during Covid and the supply chain interruptions.

[BatUtilityBelt]

It's early into this unprecedented situation, so I think it would be hard to predict anything with accuracy. But I agree it will certainly drive up prices on new, not just imports, and not just from countries with larger tariffs. Ultimately, it will affect pricing of pretty much everything. I am guessing it is the end of an era of widely available affordable gear. While these things tend to cycle, I don't want to guess how long the downturn will be. I'm planning to not buy much as it all goes higher.

[Tonray's Ghost]

Well if laptops are any 'analogue", I have been monitoring the Lenovo Ebay store for awhile now, as I had planned to buy a new ThinkPad when I visit the USA in October, mainly due to some models not being available here in Thailand. The day of the tariffs on China, Lenovo pulled all items from their store, pretty much immediately. Once the 90 day reprieve came, they re-opened with a limited selection, far smaller than previously offered. My guess is that many manufacturers will simply decide it's not worth it to ship and market in the USA, and the limited selection, maybe only high end, in demand or specialty items that can withstand the ensuing price elasticity changes will be offered. This will likely have the effect of liniting choice and of course raising prices.

[peskypesky1]

Well, them tariffs ain't going to make anything cheaper I reckon!

[Tonray's Ghost]

Well, them tariffs ain't going to make anything cheaper I reckon!

Au contraire Mon ami, the US Dollar getting cheaper by the minute

[mickey]

Even if the guitars are made in the U.S., most of the woods used are imported. As is the hardware.

[tonebender]

The Americans making things in other countries will simply move either back here or to a country that has an acceptable tariff agreement with the US. The production of many items including the coveted $300 guitar will find a home in a country willing to have a tariff agreement that facilitates the desire for said guitar. The production of the $300 guitar has been migratory for many years. We have watched it go from Japan, to Mexico, to Korea, to Indonesia, to Vietnam and onto China. For most of the companies there is an American at the helm using the host nation to provide the economic conditions to keep the $300 guitar available. Do not fret, an American will find the location necessary to give the world cheap products including the $300 guitar. When I say $300 guitar I do not mean it literally I just mean, the "cheap" guitar.

[Stoli]

Good point about the imported woods and hardware.

[golem]

It's difficult not to be political when you're talking about tariffs. The end consumer does pay for them via increased prices. How much the increase depends on whether the product was manufactured outside the US. As we know, many pedals, amps, and guitars made in the USA are still made from parts made elsewhere. Whether a particular company can stay in business depends on whether it can shift to selling directly (to cut out a middleman and reduce costs) and whether its customers can afford increased costs.

Right now, I'm just hoping the recession that it has caused doesn't deepen or lengthen.

[Stoli]

I was scrolling Reverb and Eastman guitars seem to have gone up a good bit since I bought mine. I bought a B stock that had a nick on the back of the neck and I think it was a little over 800 including shipping. Their Les Paul style prices look to as much or more than some Gibsons.

[tonebender]

Eastman offerings I have seen at their authorized dealer in our area are priced the exact same as the brand they are copying. That was before any talk of a tariff. Things are generally priced based on what people will pay for them. If they don't sell they lower the price, if they sell like hotcakes then they raise the price. That will continue to be true.

[mickey]

Good point about the imported woods and hardware.

yep. It will have as much (or more) affect on the Martin's, Gibson's, Fender's etc. as it will the imports.

[Tonray's Ghost]

Good point about the imported woods and hardware.

yep. It will have as much (or more) affect on the Martin's, Gibson's, Fender's etc. as it will the imports.

Well, why don't we just build wood factories ?

[mickey]

Good point about the imported woods and hardware.

yep. It will have as much (or more) affect on the Martin's, Gibson's, Fender's etc. as it will the imports.

Well, why don't we just build wood factories ?

In Thailand???????????????????????

[Tonray's Ghost]

yep. It will have as much (or more) affect on the Martin's, Gibson's, Fender's etc. as it will the imports.

Well, why don't we just build wood factories ?

In Thailand???????????????????????

Hmm..rice stubble guitars...I'll have to investigate that

[mickey]

Well, why don't we just build wood factories ?

In Thailand???????????????????????

Hmm..rice stubble guitars...I'll have to investigate that

If I understand correctly, the spruce used in guitars comes from Canada, the redwood from southeast Asia, the mahogany from central America and most of the rest from Africa.

[uwmcscott]

My employer is multi-national and we source, produce and ship raw materials/finished product all around the globe. A significant portion of our product goes to China and India. They have been doing this for over 100 years and tariffs/embargos are part of daily business. The main problem presented by the recent US tariffs is the uncertainty surrounding how much they are and when they will go into effect ( or not ). The other significant issue is that most other countries have clear and readily available information about their trade policies - so if we are exporting to ( or importing from ) them it's easy to find out how much you owe. The US currently has very little info about that available so people simply aren't sure what to do.

We are big enough and have a diverse enough supply chain that we will find a way around this, we've done so many times in the past. When it comes to guitars, and specifically those being imported into the US, the price will likely rise a bit as those who primarily buy from China find another supplier. The China tariff situation is essentially an Embargo, as it's impossible for anyone to make a profit at the current levels. The really small batch brands like Firefly - who are wholly dependent on China, will be hit the hardest. There are certainly other countries that can produce cheap guitars ( Indonesia, Korea, etc ) but none of them have anywhere near the capacity that China does. So it's likely that the big buyers like Epiphone, etc...are already hitting those other countries up hard to be ready. The little guys will have a lot less leverage to do the same. It is not currently possible to make a $199 guitar in the USA, and it probably never will be. Overall, prices will likely go up across the board from simple supply/demand forces in the short term.

[Tonray's Ghost]

Ok I found some SE Asian wood, now the question is how to slip it into my luggage to avoid tariffs.

I bet Glen Burton could carve a couple dozen cheap guitars out of these. That first one is tailor made for a flying V

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[sabasgr68]

So, who's gonna grab as many Agiles and/or Fireflies - or any other 'budget' guitar brand - as possible before they skyrocket?

As for Agiles, there are several nice AL/AD3200...

[BatUtilityBelt]

So, who's gonna grab as many Agiles and/or Fireflies - or any other 'budget' guitar brand - as possible before they skyrocket?

As for Agiles, there are several nice AL/AD3200...

I just grabbed 2 last week. Someone else needs to help.

[idiotsdelight]

I was thinking of offloading some Agiles/Douglas/SX's. A looming recession isn't gonna help. It's not gonna be the covid-salad days.

I was watching how it was affecting the bike market. Some Co's were attaching surcharges to bikes gotten pre-tariff to offset their upcoming increases, which is a pretty good way of telling your customers you don't care about them. I don't buy that company's products anyway, so...

[Tonray's Ghost]

I was thinking of offloading some Agiles/Douglas/SX's. A looming recession isn't gonna help. It's not gonna be the covid-salad days.

I was watching how it was affecting the bike market. Some Co's were attaching surcharges to bikes gotten pre-tariff to offset their upcoming increases, which is a pretty good way of telling your customers you don't care about them. I don't buy that company's products anyway, so...

Yeah..I expect to see a lots of chicanery surrounding the whole thing, just like the guys who sell water at 20 x cost to natural disaster victims, capitalism at its worst coming to a shop near you.

[tobijohn]

I just grabbed 2 last week. Someone else needs to help.

I'm trying but I haven't seen any that I don't already have or are reasonably priced.

[tonebender]

There will still be 10 bazillion cheap barely used foreign made guitars for sale for decades to come. They will always be the lowest priced offerings. They will always cost less than the lowest priced new ones.