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Do trade war woes = increased model prices?
Kevlar06
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Posted: Sunday, July 08, 2018 - 05:19 AM UTC
The last thing I want to do here is stir up controversy, but since many model companies get their molding done in China these days, what does that mean for the hobby market? I don't think this has been addressed anywhere yet. I just read this AM that "Just Play LLC", a large toy manufacturer who makes many Disney products, is planning on moving out of China, based on the latest "trade war" issues, but they don't know how long it will take. So what does all this mean for model builders-- I fear that it will result in price increases at best, and perhaps the demise of distributors at worst. Here's an article on some early casualties:

https://www.msn.com/en-us/money/companies/german-cars-and-american-steak-early-trade-war-victims-emerge/ar-AAzKIdE?li=BBnb7Kz&ocid=BHEA000

Anyone have any thoughts on this?
VR, Russ

barkingdigger
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Posted: Sunday, July 08, 2018 - 06:22 AM UTC
Good question - I doubt anyone is really sure just yet. But if Chinese mode3l supplies are hit by the new tariffs I worry that prices elsewhere may go up as the mfgrs try to recoup lost profits for their shareholders. All we can do is hold tight and see where we go on Trump's crazy train.
retiredyank
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Posted: Sunday, July 08, 2018 - 08:33 AM UTC
I doubt it. After all, static models don't contribute much to the gdp like vehicles, raw materials or food products do.
Kevlar06
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Posted: Sunday, July 08, 2018 - 09:41 AM UTC

Quoted Text

I doubt it. After all, static models don't contribute much to the gdp like vehicles, raw materials or food products do.



Neither do toys, yet one company has announced moving out-- and today is the third day of the "trade war". I suspect this will be worse over time. Static models are made with plastics, and the labor force behind them usually makes more than models, in some cases they make other consumer products as well.
VR, Russ
Scarred
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Posted: Sunday, July 08, 2018 - 09:56 AM UTC
Look at how many toy lines disney controls or partners with vs a model company. Does disney mean just disney toy lines like the princess movies and all those from disney cartoon movies? Or does that include Star Wars and the entire disney corporation? Most of their toys are made in china and have been for a long long time. And what model companies are china owned vs those that aren't? Of course china has their fingers in lots of pies nowadays so we will probably see some fallout from all this.
SgtRam
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Posted: Sunday, July 08, 2018 - 10:14 AM UTC

Quoted Text

Good question - I doubt anyone is really sure just yet. But if Chinese mode3l supplies are hit by the new tariffs I worry that prices elsewhere may go up as the mfgrs try to recoup lost profits for their shareholders. All we can do is hold tight and see where we go on Trump's crazy train.



Good thing we now have a decent distributor in Canada that is dealing straight with the manufacturers, we won't have to deal those tariffs on models, just everything else, thanks to Trump's stupidity.
Kevlar06
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Posted: Sunday, July 08, 2018 - 03:35 PM UTC

Quoted Text

Look at how many toy lines disney controls or partners with vs a model company. Does disney mean just disney toy lines like the princess movies and all those from disney cartoon movies? Or does that include Star Wars and the entire disney corporation? Most of their toys are made in china and have been for a long long time. And what model companies are china owned vs those that aren't? Of course china has their fingers in lots of pies nowadays so we will probably see some fallout from all this.



I agree, I think we will see fallout from this, as to what model companies are Chinese, there are a lot. Dragon, Trumpeter, Bronco, RFM, Meng are some that come to mind, with Trumpeter's parent company being a tooling and casting company for plastics other than models. Dragon actually has a bigger share in the toy and collectible market than they do in the model business. Even Wingnut Wings are manufactured in China. There are also many companies owned by US or European interests that manufacture in China (which is what this "trade war" is really about). Look at the small print on many kit boxes (Revell-Monogram and RoG are two) and you'll see "product of China" or "made in China". As tariff "retribution" increases, I don't see how the model industry can help but be affected in one way or another. Thankfully, these import tariffs on the US side don't look like they will affect trade between S. Korea, Japan, Taiwan, or Europe where companies like Tamiya, Hasegawa, Academy, AFV club, ICM, Special Hobby, Revell Germany, and others are based-- for now anyway. So, I believe we as hobbyists and enthusiasts will be affected , if not by the loss of Chinese products here in the US, then by increases in price. We do need to keep in mind the US market is only a "part" of the business (a big part) Chinese companies do worldwide. Because of this we may have a "backdoor" by going through European manufacturers who deal with China, but import their products to the US. I guess time will tell, but now might be the right time to buy that Chinese made kit before it disappears or goes up in price.
VR, Russ
brekinapez
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Posted: Sunday, July 08, 2018 - 03:59 PM UTC

Quoted Text


Quoted Text

Look at how many toy lines disney controls or partners with vs a model company. Does disney mean just disney toy lines like the princess movies and all those from disney cartoon movies? Or does that include Star Wars and the entire disney corporation? Most of their toys are made in china and have been for a long long time. And what model companies are china owned vs those that aren't? Of course china has their fingers in lots of pies nowadays so we will probably see some fallout from all this.



I agree, I think we will see fallout from this, as to what model companies are Chinese, there are a lot. Dragon, Trumpeter, Bronco, RFM, Meng are some that come to mind, with Trumpeter's parent company being a tooling and casting company for plastics other than models. Dragon actually has a bigger share in the toy and collectible market than they do in the model business. Even Wingnut Wings are manufactured in China. There are also many companies owned by US or European interests that manufacture in China (which is what this "trade war" is really about). Look at the small print on many kit boxes (Revell-Monogram and RoG are two) and you'll see "product of China" or "made in China". As tariff "retribution" increases, I don't see how the model industry can help but be affected in one way or another. Thankfully, these import tariffs on the US side don't look like they will affect trade between S. Korea, Japan, Taiwan, or Europe where companies like Tamiya, Hasegawa, Academy, AFV club, ICM, Special Hobby, Revell Germany, and others are based-- for now anyway. So, I believe we as hobbyists and enthusiasts will be affected , if not by the loss of Chinese products here in the US, then by increases in price. We do need to keep in mind the US market is only a "part" of the business (a big part) Chinese companies do worldwide. Because of this we may have a "backdoor" by going through European manufacturers who deal with China, but import their products to the US. I guess time will tell, but Now might be the right time now to buy that Chinese made kit before it disappears or goes up in price.
VR, Russ



Guess I should order my Bergepanther soon. Fortunately, most of the armor I want that would have come from Dragon I have acquired, so really the only thing I am worried about are some upcoming aircraft releases from China (HK Models). Most of the other Chinese armor makers I have bought what I want so far. Most of the other stuff I need I can get from the non-Chinese makers.
Vicious
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Posted: Sunday, July 08, 2018 - 04:56 PM UTC
personally I'm not too worried, or they find a compromise with the blond with the tupee or as they say in Italy "fatta la legge trovato l'inganno" i think a good translation is "Every law has its loophole"

I am more worried about the new Aussie law about the 10% tax on online purchase overseas...
Bravo1102
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Posted: Sunday, July 08, 2018 - 08:04 PM UTC
Even if it doesn't directly affect as the prices, I am certain some companies will find a reason to raise prices regardless.

You know this could mean a huge surge in Investment in Eastern Europe, the Philippines and India. Tamiya, Airfix and Eastern European companies could pull ahead of the Chinese giants. There might even be hope for Italeri as their kits will start looking inexpensive.

Help! I'm being forced to build Italeri because of Trump's trade war!
Scarred
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Posted: Monday, July 09, 2018 - 09:50 AM UTC
I wonder if the government is prepared for black market models? Illicit shipments of models hidden in cargo containers with counterfeit viagra and sleeping beauty dolls made in Nicaraguan sweat shops.
drabslab
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Posted: Tuesday, July 10, 2018 - 04:50 AM UTC
I guess most people here have sufficient stash to wait for any trade war to end.

And yes, a few manufacturers may use this opportunity to justify a reorganisation or price hike.

But then that stash solves that as well.
CReading
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Posted: Tuesday, July 10, 2018 - 11:03 AM UTC
"we won't have to deal those tariffs on models, just everything else, thanks to Trump's stupidity."

Well Kevin, for a moderator/editor for this site one would think you, of all people would adhere to the "no political postings allowed" and keep your opinions on politics/political leaders you disagree with out of your posts.


Cheers,
Charles
brekinapez
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Posted: Tuesday, July 10, 2018 - 12:06 PM UTC

Quoted Text

"we won't have to deal those tariffs on models, just everything else, thanks to Trump's stupidity."

Well Kevin, for a moderator/editor for this site one would think you, of all people would adhere to the "no political postings allowed" and keep your opinions on politics/political leaders you disagree with out of your posts.


Cheers,
Charles



Yes, I would also think that. And considering who is in charge of Canada right now...
SgtRam
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Posted: Tuesday, July 10, 2018 - 12:21 PM UTC

Quoted Text

"we won't have to deal those tariffs on models, just everything else, thanks to Trump's stupidity."

Well Kevin, for a moderator/editor for this site one would think you, of all people would adhere to the "no political postings allowed" and keep your opinions on politics/political leaders you disagree with out of your posts.


Cheers,
Charles



I am sorry you did not like my post, it was the off the cuff comment, and yes the admin/editors on this site are human, as well as volunteers. We are all allowed our own opinion.

Thanks for the input.
Kevlar06
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Posted: Wednesday, July 11, 2018 - 03:11 AM UTC
It certainly was not my intent to incite comments on the current administrations actions, only to ask others what they thought the effect of these tariffs on the hobby industry might be. If one researches the causative issue, there is no denying grounds exist for the increasing trade imbalance between China and N. America. No doubt it has been brought about by the insatiable demand for cheap Chinese goods by N. American consumers (although these goods no longer seem "cheap"). No one can deny Chinese protectionism and US consumer habits have led us to this trade deficit ($200B exported vs $500B imported last time I looked). But wether or not the current administrations actions in attempting to "level the playing" field are correct is not the question now. How these tariffs will affect us as hobby consumers isn't entirely clear. I think the question can be expanded a little into more critical "philosopiphical" questions:
1) In the long term, will the tariffs have the desired effect of "bringing back" more of the hobby industry share to N. America?
2) Will Chinese hobby manufacturers be able to continue to exist without the US market share by shifting thier products to Europe or elsewhere?
3) Will US hobbyist consumers be willing to pay higher prices for certain products?
4) Is there opportunity for "non-tariff" manufactures to benefit and perhaps increase thier "market share"?
5) In such a narrow "niche/luxury" goods market, will these tariffs cause US importers/distributors to be irreparably harmed, especially since there is almost no domestic (US) hobby manufacturing anymore?
These are the serious questions we as hobbyists should be aware of, and to some extent be prepared for. Remember, the hobby industry is bigger than just some plastic kits sitting on the shelf. There are paints, tools, RC, Model RR, Jewelry, Florist, Dollhouse, woodworking and electronics hobby products too, not just plastic kits. There are entire dealers and wholesalers who depend on mostly Chinese products to exist (when was the last time you looked at who made products for Hobby Lobby or Michaels?). And to believe containers of "hobby goods" will somehow slip through the fingers of attentive custom officials is a little like believing in the "tooth fairy" (my apologies to anyone who does believe in the tooth fairy). So, seriously, how do you think your hobby will be affected?
VR, Russ
drabslab
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Posted: Wednesday, July 11, 2018 - 03:24 AM UTC

Quoted Text

I am sorry you did not like my post, it was the off the cuff comment, and yes the admin/editors on this site are human, as well as volunteers.



Yep, we all make mistakes


Quoted Text

We are all allowed our own opinion.



Also true, but it is often quite tricky to express political tinted opinions on an international site.

I have to admit, I am often tempted and usually I regret my words afterwards.

Let us bear in mind that life looks very different when seen from different parts of the world.

Keep on modelling
Kevlar06
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Posted: Wednesday, July 11, 2018 - 04:16 AM UTC

Quoted Text

We are all allowed our own opinion.



Let us bear in mind that life looks very different when seen from different parts of the world.
[/quote]

I'm not concerned at all that an off-hand comment (regardless of how correct or incorrect it might have been) would be made in this post-- I'm just trying to get some serious thought going, and would like to get back on track with what you all think about the effect on the hobby industry might/will be. I have my opinions, and would like to know yours-- "it sucks" or "I don't know" or "I don't care" are not the "thoughtful" discussions I was looking for. Not that it makes much difference in the long run, but I'd like to know your thoughts (and secretly wonder if I should be buying up those Chinese kits I've put off buying before the rush starts!).
VR, Russ
SgtRam
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Posted: Wednesday, July 11, 2018 - 04:21 AM UTC


Not sure about in the US, but we can order kits in Canada from say Lucky Model, and there is no duty or tariffs on them. And again, we are seeing more new Canadian distributors starting up, so if the US is hit by new fees on kits from China, you could always order from Canada.
Kevlar06
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Posted: Wednesday, July 11, 2018 - 07:51 AM UTC
Kevin, I understand ordering is possible form overseas or foreign locations, but everyone seems to be missing my point-- which is: Will these tariffs damage the hobby industry in the long term by putting the manufacturers or the distributors out of business? I believe the US is the largest importer of Hobby products from China. There are now 6,000 items and $500B in trade on the tariff list which are at risk (and I can't believe hobby products will be exempt). So, given that logic, if Chinese companies are dependent on trade with the US, won't that also affect international markets as well? Or will international markets benefit? We seem to be confusing "customs duty" with the tariffs-- that's not the case, as "customs duty" only affect individual consumers. A tariff on the other hand is much more widespread and has the effect of "punishing" entire markets-- manufacturers and distributors alike, not to mention shippers. These effects are already being felt (after only a week of tariffs!) in the agricultural market, and the shipping and handling markets both in China and the US. Already the price of Cherries has dropped here in the US (China is the biggest consumer of US cherries) and Chinese meat packers and shippers are cancelling orders. Certainly foodstuffs are more important than hobby products. So yes, for a while, we can order through another country's market as individuals, but only if the manufacturer is still able to manufacture and the distributor has an item to distribute (in the narrow sense, I entirely see your point about the "stupidity" of the situation, but in the "big picture" the tariffs do make sense from a US perspective, it's just that no other administrations have taken these steps in recent memory (for obvious reasons). What will the ultimate outcome be for the serious "hobbyist"? Maybe this question is too obtuse or early to pose for an intelligent answer-- perhaps it's true true-- we'll just need to wait and see. But I'd still like to hear others opinions.
VR, Russ
SgtRam
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Posted: Wednesday, July 11, 2018 - 08:42 AM UTC
I think what you need to realize, is North America is a drop in the bucket for most hobby manufacturers. Asia and Europe out do both the US and Canada. So as for hurting the hobby, I doubt it, other then possibly US, due to the tariffs, and it may even cause Canadian distributors the chance to grow. This trade war is really only going to hurt US buyers.
Kevlar06
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Posted: Wednesday, July 11, 2018 - 09:11 AM UTC
Kevin, thatís a good answer. I tend to agree with you, but Iím not so sure the US is ďa drop in the bucketĒ as youíve said. I used to work in a LHS that was also a distributor (we even had arrangement with a British Columbia based Distributor) We received orders worldwide, especially from S. America, East Europe, and Canada (and even some from China) for Chinese produced goods (kits and tools). This tells me many foreign markets were dependent on US distributors, at least to keep prices manageable (it was cheaper for our Chinese customers to buy some products from us and get them shipped back to China! Go figure that one out!?! So if US markets are affected, wonít other markets see an increase in price? Especially if production is down and demand goes up? Or will overseas markets see a price drop as the market is flooded with goods that canít be sold in the US anymore? Any economist hobbyists out there?
VR, Russ
drabslab
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Posted: Wednesday, July 11, 2018 - 09:17 AM UTC

Quoted Text

Will these tariffs damage the hobby industry in the long term by putting the manufacturers or the distributors out of business?



My opinion: No, definitively not.

Most of the modellers have a stash large enough for the rest of their lifetime and still keep buying.

I guess that a price raise in a part of the world will only lead to modellers finding alternative ways to get those goodies anyway, if necessary for a higher price.

The real risk that companies face is a change in mentality, and people not buying anything new until their stash is gone.





SgtRam
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Posted: Wednesday, July 11, 2018 - 09:38 AM UTC

Quoted Text

Kevin, thatís a good answer. I tend to agree with you, but Iím not so sure the US is ďa drop in the bucketĒ as youíve said. I used to work in a LHS that was also a distributor (we even had arrangement with a British Columbia based Distributor) We received orders worldwide, especially from S. America, East Europe, and Canada (and even some from China) for Chinese produced goods (kits and tools). This tells me many foreign markets were dependent on US distributors, at least to keep prices manageable (it was cheaper for our Chinese customers to buy some products from us and get them shipped back to China! Go figure that one out!?! So if US markets are affected, wonít other markets see an increase in price? Especially if production is down and demand goes up? Or will overseas markets see a price drop as the market is flooded with goods that canít be sold in the US anymore? Any economist hobbyists out there?
VR, Russ



Have spoken to some vendors, mostly in Europe, almost 75% of their production runs go to Asia, and most Chinese companies are producing model kits that will appeal to the Asian market. Also, having been to the UK, and following many shows that occur in Europe, they outclass and outsize ANY show I have seen and/or attended in North America. This is definitely a show of the size of the market in Europe compared to North America.

Also, if you can find it, there is a recent blog from the CEO of Tamiya that states his opinion of the global hobby market, and in most I have to agree, the biggest growth in the hobby demands right now is in Asia.

brekinapez
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Posted: Wednesday, July 11, 2018 - 09:48 AM UTC
I'm sure a good bit of that is the improved economic situation of most Chinese now that capitalism has been embraced to some degree and workers are making more money, which means they now have more disposable income to put towards hobbies. It is a natural outcome of increased levels of prosperity that luxuries become more commonplace as people can afford them.