Spatial Audio Raven Preamp

Do the tariffs affect the used markets as well? I'm thinking yes but not sure.

Big +1 @lynn_olson @atmasphere @donsachs I speak as a finance/economics person this tariff thing is patently insane. It’s not gonna help US manufacturing in the least and is just gonna hurt hard-working folks by making them have to pay more for audio products and for stuff at Walmart, Target, etc.  It’s just nuts. 😖😖😖  Wasn’t this guy largely elected to lower prices?  I can’t even. 

Actually, he is violating the CUSMA free trade agreement (which HE negotiated during his first term).  There is a clause that says you can get out and establish tariffs under "national security" reasons.  So they invented the fentanyl problem at the Canadian border to do so.  Less than 1% of fentanyl (far less than 1%) that enters the USA does so through Canada.  A significant proportion of the illegal guns that enter Canada do so through the USA, but we prefer to have diplomacy about that issue rather than start trade wars.  It is a made up excuse so he can tear up the trade agreement and start a tariff war.  Why?  Who knows.  Every sane economist says it is a horrible idea, but he listens to Navarro, who has been ridiculed by the economics community as an idiot.   So here we are in a tariff war for no reason whatsoever except the whims of a couple of people in power.

This will hurt everyone... sad, but true.

Electronics in particular are globally sourced. Here’s a simple example: say there’s a circuit board that AtmaSphere, or Spatial, buy in small quantities, say in the low hundreds. That’s a lot of circuit boards for a high-end manufacturer.

The circuit board might be assembled in the USA, Canada, the UK, the EU, Japan, South Korea, Taiwan, China, Vietnam, Thailand, the Phillipines, or many other countries. But that’s the finished board. It contains semiconductors, which come from any of the countries mentioned above. And resistors. And capacitors. And the glass fiber for the board. And the copper in the circuit traces.

From the perspective of AtmaSphere or Spatial, we just see a circuit board that does what we want, and we hope (and pray) we get a timely delivery without getting snagged in customs. Delays are a huge deal to any manufacturer. Every part is a critical part, and parts shortages shut down production, which is very expensive, because it costs money to keep the lights on, pay off capital expenses, and pay for trained staff. Every day without production is a day closer to bankruptcy.

On-again, off-again political posturing about tariffs, quotas, additional customs screening, etc. etc. is calamitous for small manufacturers. The big boys like General Motors and Ford have the capital reserves to ride things out for several months, but the little guys (that’s us, folks) are working on very thin margins with a fickle customer base.

By "fickle" I mean a customer for a Ford F150 is going to buy a full-size pickup truck no matter what. They might switch to a Chevy Silverado, but they’re not going to buy a VW or BMW that cost the same, because those are totally different products. By contrast, a high-end customer can always wait another year or two, and can choose from scores of different products at a wide variety of price points.

I’m not crying in my beer, because what I just described is how the entire high-end business works, and you just have to accept uncertainty as part of the deal. But you wonder why artisan-assembled high-end costs more? That's why.