Tariffs and sky high audio prices.

I suspect that we would all agree that tariffs create an upward pressure on price while at the same time, competition creates either a leveling or downward pressure.  I wouldn't be surprised if a year from now, looking back, overall audio prices went up 5-10%...not 25%.

And, an unintended but likely consequence is that preowned gear will be a little bit more attractive and the downward price trend my reverse.

Back to gold for a moment.  I'm not sure that it is good from the standpoint of backing currency....or from the standpoint of owning mines. 


Getting it out of the ground and turning it into 99% pure bricks has an operating/production cost in the  $600 per oz range...now add the cost of buying the mining property, royalties and fees to the countries you operate in, reclaiming the land....and you are between $900-1000 per oz total cost.


So, if gold were not a commodity but a product that sold in the 2x cost range ...it would likely be in the $1700-2000 per oz.  For the last 10 years it has pretty much been in the $1300 range with a high of $1900 and a low of $900.

My feeling is that while governments may compete hard with each other and at times be angry with each other, those actions and sentiments don't usually reflect what is happening at the every day people level.


For the most part, people are people the world over.  They want to live their lives, raise their families, be healthy, live as comfortably as possible and be left alone.

On the other hand, governments ostensibly want to protect their people but seem to believe that to do so means that they must gain as much economic power and influence as possible...the natural result of which is that governments compete with other governments....and sometimes in ways that is painful to people.

Where does that leave us...ultimately there is usually a recognition of mutual need.  As an example, China doesn't produce much oil, not that they couldn't, but they do produce a lot of rare earth metals.  The U.S. on the other hand does produce oil but has given up production of rare earth metals.  So, we each produce what we are good at and then trade at fair value....or we each try to produce everything, including what we are not good at resulting in higher cost to both.  Time will tell how well we figure this out.

Once upon a time, many years ago, back in 1961 a man of power and influence said, "And so, my fellow Americans, ask not what your country can do for you; ask what you can do for your country. My fellow citizens of the world, ask not what America will do for you, but what, together, we can do for the freedom of man".


It would seem that since then, individual selfishness has resulted in the will of the minority taking precedence over the will of the majority and has resulted in political parties caring more about the power of the party than the good of the people.

Some would say that this is just history repeating itself...that this is the fall of the Roman empire all over again.  It is hard not to fear that all may soon be lost (from the standpoint of America as a symbol of power being used for the good of all people) if we are unable to change our direction...both as individual people and as a country.

No doubt if the Chinese or Mexican tariffs last more than a couple months, there will be unintended consequences.

For those importing and selling audio products made in China or products made with parts from China, their cost will be going up.  Obviously, they will want to pass them along...but often times with higher prices come lower sales so there will also be pressure not to raise prices. If sales are low enough, there could actually be price reductions and possibly, in an almost worst case scenario, layoffs.

Often times, it is the biggest companies, those that rely on scale, that produce in China...so, not to pick on KEF, but are we as buyers currently getting a big savings because of production in China?  One might argue that we are not, or one might argue that KEF would have to have higher prices if their products were made in Europe or the U.S.

Where does that leave us?  My experience over the past few years has been that there are really good small American companies making great products here in the U.S. that might actually benefit from tariffs if it means that more people decide to give them a try. 


Tariffs are not a good thing overall, they are a tool to be used to try to get a more level playing field.  They will have unintended consequences.  Some will benefit, some will not.  In the end, between good small American companies and possibly a more robust preowned market, I suspect we don't really have that much to fret about...from an audio perspective that is.