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40% Tax on Goods Imported into the USA - What would it mean for guitars?

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  • 40% Tax on Goods Imported into the USA - What would it mean for guitars?

    I was watching a news program last night and heard a politician who is pushing the idea of imposing a 40% tax on all goods coming into this country.

    The idea being that if something cost 40% more, American factories would become profitable and competitive once again and more manufacturers would choose to make products here. This would jump start our economy, etc.....

    While this idea will probably never gain traction it is an interesting one. I always try to buy an American made product when I can find them and the quality is usually (not always) much higher then their foreign made counterpart.

    For example, I'll buy Lucky Brand clothes, New Balance sneakers, etc....

    If this happened for guitars the price of the Asian made guitars would rise 40% or to put it into concrete terms the price of an Agile AL-300M would be about $1000 - which would mean you could get a Gibson Les Paul Tribute ($850)or Les Paul Studio ($799 - $1300) for about the same money.

    I used MF and the Rondo site for pricing.

    It would be interesting to see if we would see cost cutting on the imported models so that they would retain their price point or if they would still be viable alternatives to the American brands at the same price point.

    Knowing what I know about Gibson would tell me they would do one of the following:

    1- Raise the prices on the American Studios to about $1400 and increase the prices on everything above them accordingly

    2- Move Epiphone back to the USA and increase prices on everything

    3- Cost cut 40% out of the Epiphone line, make them oversees and sell them for the same price.

    I would imagine most of the "American" brands would do one (or a combination) of the things above.

    Where would that leave a company that produces all of their product oversees?

    Take a look at ESP for example.

    ESP makes an Eclipse model that costs $1640.

    http://guitars.musiciansfriend.com/product/ESP-Standard-Series-Eclipse-II?sku=516653

    If this happened, this guitar would cost about $2300.

    Would that guitar be able to compete at that price? For that money you would be in Les Paul Standard price range or even entry level Fender CS territory.

    Would people pay that or would you see a company like ESP start eliminating the higher end stuff and concentrating on the lower end of the market - or would ESP build a manufacturing facility in the US?

    Pretty interesting stuff. Like I said, I doubt this will ever happen but it would be interesting to see how this would play out.

    As for myself, I can not afford to buy new guitars so it wouldn't affect me as much but it would be fun to see what would happen.

  • #2
    A 40% across-the-board tariff would start a trade war. The farm lobby (mostly export-oriented) alone would never allow it.

    This is pie-in-the-sky stuff. Free trade is here to stay; the countries from which we import might change, and the trade deficit might shrink, but there won't be a new Smoot-Hawley tariff.
    Giant KudzuFacebook • SoundCloud"I wear Abercrombie so bïtches know I dominate."

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    • #3
      there won't be a new Smoot-Hawley tariff.


      Just hearing that makes me instantly flash back to Ben Stein's scene in Ferris Bueller's Day Off...

      "In 1930, the Republican controlled House of Rep, in an effort to alleviate the effects of the

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      • #4
        Well, i'd be canadian.

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        • #5
          I'd love to see some sort of way to deal with the foreign subsidized cheap products flooding the US. We have been long too lax in letting our government and the corporate giants sell us out. I don't think a fair playing field is too much to ask for.

          In my situation, I've been approached and have also looked into having a line of my lap steels made overseas. Its stupid cheap what I can get done in China because of their devalued currency. As tempting as it all is, in all good conscious I'm just not willing to feed the beast any more than I have too.
          My Name is Tom Pettingill ... I build Hand Crafted Custom Lap Steel Guitars
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          • #6
            In my situation, I've been approached and have also looked into having a line of my lap steels made overseas. Its stupid cheap what I can get done in China because of their devalued currency. As tempting as it all is, in all good conscious I'm just not willing to feed the beast any more than I have too.


            The process usually goes something like this: You contract with a firm to build a number of instruments, let's say 2000. They build at least 4000, ship you the 2000, then sell the rest and pocket the difference.
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            • #7
              I imagine it would mean Gibson's quality control would slide further into mediocrity, as they know they're no longer competing with the relative quality of imports. Their prices would rise, maybe significantly, because prices would now be governed by a much smaller market. There would be no incentive for US manufacturers to be competitive, except domestically. I also see foreign ex-competitors passing us by in terms of innovation and quality, and we'd be coveting excellent brands that are artificially priced out of our reach. We'd ultimately fall further and further behind as a guitar-manufacturing country, I think.

              An interesting side note to this is what comes of the dynamic between Gibson and Fender. I could see a market that favors Fender products (on a units sold basis) even more than it does today.
              Originally Posted by csm


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              "You know, once you've had that guitar up so loud on the stage, where you can lean back and volume will stop you from falling backward, that's a hard drug to kick." — David Gilmour

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              • #8
                What if Brazil invades and conquers the US?

                Also an interesting thought experiment and about as likely to happen.
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                Originally Posted by ashasha


                I find that it's just cheaper to turn my **************** up louder.

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                • #9
                  I'd love to see some sort of way to deal with the foreign subsidized cheap products flooding the US.


                  Can you say "globalization" and "profits?" IMHO the "culprits" are usually US owned and run corporations outsourcing to increase their profitability, not the foreign governments whose main concern is keeping their people employed. Control the US corporations and you can start getting some control over the bigger problem.

                  As far as a "devalued" currency goes, all countries "manage" their currency values through buying and selling. The Canadian dollar, as one example, was $1.20 US when I was growing up. In the late 60's the CDN government decided they wanted to increase exports so they artificially manipulated the currency and have held it artificially way below the US until very recently. Was Canada branded a currency manipulator? No, because the US used to need Canadian raw materials for their manufacturing sector. The main difference between Canada and China is the former sells raw materials, the latter sells finished goods.

                  It's all just a bunch of smoke and mirrors.
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                  • #10
                    I imagine it would mean Gibson's quality control would slide further into mediocrity, as they know they're no longer competing with the relative quality of imports. Their prices would rise, maybe significantly, because prices would now be governed by a much smaller market. There would be no incentive for US manufacturers to be competitive, except domestically. I also see foreign ex-competitors passing us by in terms of innovation and quality, and we'd be coveting excellent brands that are artificially priced out of our reach. We'd ultimately fall further and further behind as a guitar-manufacturing country, I think.

                    An interesting side note to this is what comes of the dynamic between Gibson and Fender. I could see a market that favors Fender products (on a units sold basis) even more than it does today.


                    Huh, interesting. In my experience the best built guitars I have seen have come from America with a couple exceptions here and there.

                    I believe that Fender has outsold Gibson for years, as FMIC is a much bigger company and their products have historically (no pun intended) cost less to build and have taken less time. I mean, I can make a Telecaster in my garage in a day and a half, but it would take me a week to build a Les Paul - and it would cost more too.

                    I think Gibson and Fender have both done a great job at building 'lifestyle' brands over the years and I don't even really think of them as competitors. Many people own both.

                    I couldn't see myself walking into a store to buy a brand new Les Paul and walking out with a brand new Stratocaster. I think that once someone wants one or the other that's pretty much what they buy. I could see myself buying a Les Paul then 6 months later buying a Strat.

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                    • #11
                      Imposing such taxes on import goods would be disastrous for everyone. Foreign companies would withdraw, and the price levels here would become almost unbearable. Also low import taxes allow us to get things that we can't necessarily produce here...
                      boosh!
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                      • #12
                        Actually, I think the worst thing would be countries calling in their debts but I would like to try to stick to the hypothetical (if not practical) situation put forth in the OP.

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                        • #13
                          Its a horrible idea. American workers are fat, lazy, and don't care - the blue collar working class, unions, and the companies they work for and are involved with care more about themselves (benefits, profits, more money) than producing a good product, their customers, and pride in the job they do. Generally speaking, American craftsmanship sucks and its no wonder factory jobs have been shipped off and remain there. I know that's a broad brush, but it is true. There are some exceptions to the rule.

                          I had some recent dealings with a labor official, just mind blowing what the attitude was. I try to buy American products but frankly, I'm tired of paying more and being burned time after time after time. My fairly new Chrysler Town & Country is a piece of junk, the recent Gibson I had shipped to me had just horrible QC (well documented here in the HGEG). I'm going foreign from here on out I think. Made in America is a thing of the past to me.
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                          • #14
                            Its a horrible idea. American workers are fat, lazy, and don't care - the blue collar working class, unions, and the companies they work for and are involved with care more about themselves (benefits, profits, more money) than producing a good product, their customers, and pride in the job they do. Generally speaking, American craftsmanship sucks and its no wonder factory jobs have been shipped off and remain there. I know that's a broad brush, but it is true. There are some exceptions to the rule.


                            What about non-Union manufacturing like we have down South? The quality on the non-Union built Toyotas (for example, I don't own/would never buy a Toyota) seem to have a reputation for high quality?

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                            • #15
                              depends what company is shipping stuff over. for guitars, most of the big companies are american, but make all their cash on importing.

                              in canada there was an attempt to add a 30% tax to bicycles imported under $300 ($700 retail). this in addition to a 20% anti dumping tax that already exists on bottom end bikes (sub $100 i think). that tax of course was only in the interest of one quebec bike maker who was unable to compete on the merrits of their product (they sell junk).

                              the hearing for the tax went something like this:

                              canada: anyone oppose this tax?
                              every canadian bike retailer: yes.
                              canada: sucks to be you.
                              giant bicycle: but we dont compete for the same customers, we dont sell at walmart.
                              canada: sucks to be you.
                              giant bicycle taiwan: thats ok, we'll drop our prices 30% to eat the tax, then another 30% to run the company your protecting out of business.
                              canada: .... ****************. nevermind!

                              the result? the original anti dumping tax is now in process to be repealed.

                              protectionism doesnt work. its political grandstanding to make certain groups of voters think the government is protecting their jobs. in reality they are just protecting the pockets of a few corporations who dont know how to run a profitable company.
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