Hi All,
Just had this posted on my feed, pretty scary stuff for the future of Model Railroading in North America. If someone like Bachmann went down I wonder how it would affect Bachmann UK?
That's very sad. Hopefully these huge tariffs won't last long. These businesses can't last long if they have to find large amounts of cash for tariffs before they can get more stock into the country while they have their income stream reduced because modellers can't afford to pay post tariff prices.
And from Rapido Trains with input from Bachman US, Kato US and several other US companies:
https://youtu.be/fH_ejJaqxE0
Bachmann US is part of the same Kader Industries as Bachmann UK, Farish and EFE. If there's a reduction in models flowing to the US for the next 4 years then what chance of those production slots being given over to new or re-runs of Farish models?
Indeed its an Ill wind, but a stiffled US demand on Chinese manufacturing may result in capacity and i dare say lower costs for Europe bound goods. Does China see Bachmann as a European or American company ?
Could someone not set up offices/warehouse in Canada and order/import from China from there?
OK, there are tariffs between Canada and the USA but only 25% as opposed to 150%.
Asking out of pure ignorance :dunce:
Quote from: Newportnobby on May 02, 2025, 11:35:33 AMCould someone not set up offices/warehouse in Canada and order/import from China from there?
OK, there are tariffs between Canada and the USA but only 25% as opposed to 150%.
Asking out of pure ignorance :dunce:
Depending on which source you believe, DT's new rules mean if goods pass through a third country before reaching the US either you pay the HIGHER of the two tariff rates or you pay BOTH... :worried:
Quote from: Newportnobby on May 02, 2025, 11:35:33 AMCould someone not set up offices/warehouse in Canada and order/import from China from there?
OK, there are tariffs between Canada and the USA but only 25% as opposed to 150%.
Asking out of pure ignorance :dunce:
This was the argument for putting tariffs on unhinabitted islands to shop companies trans-shipping through low or zero tariff zones, hence all the penguin jokes. My understanding that substatial changes / work has to be done in second country to get lower tariff. One option could be to ship unboxed / unassembled parts to US and have a finishing / assembly line as the tariff on parts with lower value would be less. But you then need to setup and train a workforce for that roll when you already have one. You will also have more wastage with damage in transit and staff training / bedding in. So cost will rise anyway. The hobby won't get a special excemption as every industry / sector will plead the same we are special, it will only work for things close to Trump and his team, so perhaps theirs a modeller in his camp it might work.
While warehouses can't function across the border,I suspect that model shops in Vancouver, on the west coast and Toronto /Montreal/ Ottawa towards the east plus any in between near the border will get an increase in cross border visitors wanting stuff for personal import below the personal tax level which I believe is $800.
Quote from: The Q on May 02, 2025, 02:03:50 PMWhile warehouses can't function across the border,I suspect that model shops in Vancouver, on the west coast and Toronto /Montreal/ Ottawa towards the east plus any in between near the border will get an increase in cross border visitors wanting stuff for personal import below the personal tax level which I believe is $800.
Not sure that will work as many of the Canadian shops (and there aren't that many) use US distributors anyway, such as Walthers. You're not importing directly from China if you're a Canadian company selling say BLI or Bachmann, your likely getting it from the US company direct. So I see Canadian prices being affected by both the US tariff on China, PLUS potentially any Tariffs we 've imposed on the US, plus the weak Canadian dollar will increase that cost to Canadian consumers AND US consumers buying from Canada
All pretty messed up stuff
Quote from: The Q on May 02, 2025, 02:03:50 PMWhile warehouses can't function across the border,I suspect that model shops in Vancouver, on the west coast and Toronto /Montreal/ Ottawa towards the east plus any in between near the border will get an increase in cross border visitors wanting stuff for personal import below the personal tax level which I believe is $800.
Not anymore. That exemption just ended.
Quote from: Richard @ N'Tastic Scale Models on May 02, 2025, 12:15:08 PMQuote from: Newportnobby on May 02, 2025, 11:35:33 AMCould someone not set up offices/warehouse in Canada and order/import from China from there?
OK, there are tariffs between Canada and the USA but only 25% as opposed to 150%.
Asking out of pure ignorance :dunce:
This was the argument for putting tariffs on unhinabitted islands to shop companies trans-shipping through low or zero tariff zones, hence all the penguin jokes. My understanding that substatial changes / work has to be done in second country to get lower tariff. One option could be to ship unboxed / unassembled parts to US and have a finishing / assembly line as the tariff on parts with lower value would be less. But you then need to setup and train a workforce for that roll when you already have one. You will also have more wastage with damage in transit and staff training / bedding in. So cost will rise anyway. The hobby won't get a special excemption as every industry / sector will plead the same we are special, it will only work for things close to Trump and his team, so perhaps theirs a modeller in his camp it might work.
The labor costs for assembling products in the US will offset any savings on tariffs. You can't pay US employees the same rates as Chinese factory workers.
As for exemption of model trains, there's some precedence there. The previous policies recognized that the US has never had a comparable model train industry to the foreign manufacturers, so there was never any real domestic competition (and there certainly won't be any now). If the current administration is smart enough to understand this (which is dubious) then there's grounds for that industry and similar specialty industries to be exempt. But of course with how aggressive the changes have been it's looking like too many government officials have been drinking their own Kool-aid so to speak.
Quote from: class8mikado on May 02, 2025, 10:08:08 AMIndeed its an Ill wind, but a stiffled US demand on Chinese manufacturing may result in capacity and i dare say lower costs for Europe bound goods. Does China see Bachmann as a European or American company ?
I would expect that China sees Kader (owner of Bachmann et al) as a Chinese company.
Kader are already loss making, if they lose all their sales in the US then there's a chance that they'll go bankrupt.
I would expect that prices for Chinese models will go up, rather than down, as the various factories try to make up for the loss of the US market.
And also as one of a number of expats over here waiting for parcels from suppliers in the UK the devil is in the detail.
QuoteFollowing the Secretary of Commerce's notification that adequate systems are in place to collect tariff revenue, President Trump is ending duty-free de minimis treatment for covered goods from the People's Republic of China (PRC) and Hong Kong starting May 2, 2025 at 12:01 a.m. EDT.
QuoteThe Secretary of Commerce will submit a report within 90 days assessing the Order's impact and considering whether to extend these rules to packages from Macau.
I'm no expert but the optimist in me thinks that postal shipments from UK retailers will still be eligible for the $800 de minimis exemption.
Hopefully I'll know by the end of the month.
Regards,
John P
Hello folks
Further to this issue of tariffs here is the first page of the Broadway Flyer the newsletter of Broadway Limited Imports (BLI). Note, this page has been trimmed by me. It is a succinct statement of what these tariffs mean to the purchase of railway equipment in the US. The threat to the hobby in the US may be a threat to us all as has been pointed out. I originally posted this on maridunian's thread Mwynwr Tryciau Colliery - the Many Tricks Mine, but I think it belongs here.
Webbo
The Broadway Flyer: April 2025
An update on tariffs:
Below is a message from our President and CEO Bob Grubba,
Dear Customers and Industry Partners,
In April, the U.S. government imposed a 145% tariff on model trains imported from China—products that had previously been tariff-free. Broadway Limited wants to provide you with a clear explanation of what's happening, how it affects you, and what steps we're taking in response.
A tariff is a tax collected by the US government from US companies when we import a product. Trains from China now have a 145% tariff, meaning a $200 model would have a tax of $290, making our total cost $490. BLI can absorb some of this, but the retail price would still rise by 80%, meaning the retail price for an HO diesel would rise from $375 to $670. An HO Big Boy would rise from $849 to $1,500. We believe that if tariffs are left at this level, the model train industry in the US will be wiped out, including all manufacturers, distributors and hobby stores.
BLI started manufacturing in Vietnam 6 years ago, but the process is slow. We now import 1/3 of our product from Vietnam, which only has a 10% tariff.
BLI would like to manufacture in the US, but many of the molds and components are not available here, and since the tariffs were implemented at such a high rate with almost no warning, we will be bankrupt before we can start production. For Broadway Limited, this means our 25 year old company will close and our 15 employees in Ormond Beach, FL will lose their jobs permanently.
How can you help?
Broadway Limited would like our government to negotiate with China to eliminate unfair trade practices without destroying the model train industry.
Congress has the power to negotiate tariffs. Use the links below (not shown here) to contact your senators and representative asking them to reduce these tariffs to a reasonable level and implement them gradually to save our hobby and the jobs of American workers employed in the industry.
BLI is part of the Hobby Industry Coalition. See the video produced by our fellow model train manufacturers HERE and visit http://hobbycoalition.org/ to find out more about how the industry is working together to solve this issue.
Thank you for your continued support. We urge you to continue pre-ordering our products. Since the tariff situation changes daily, we will continue to announce products at their regular MSRP and will increase prices as needed when the products clear customs. You will be able to cancel orders if the tariff is still in place when the product arrives.
I expect arrangements will be made in order for all companies selling model railway items in Canada to import direct from China. This may help a little but the big market for model railways is the USA. The Kadar factory in China will have all the overheads of running a business big enough to support the USA marketplace, if that market disappears, even for a short time, they may well struggle. In the short term it may well be that getting things made in China for the UK/European market may be easier. Long term it is probable that tariffs will reduce but what irreversible damage will have been done in the meantime?
We would miss Farish very badly if Kadar decided to cease trading so I hope the current situation in the USA is a short blip rather than a long term change.
Have you noticed that only goods and not services are mentioned with regard to this trade imbalance in the USA? Just think every Windows licence, every bottle of coke, every piece of KFC etc etc sold around the whole world earns a licence fee which goes to the USA. I expect the USA earns a lot from financial services around the world as well. If services were taken into account the trade imbalance picture would look very different although I doubt it would make much difference so far as trade with China is concerned.
Yes, it truly amazes me that Trump thinks the US has been hard done by in its trade/exploitation relationships with pretty well all countries around the globe.
Webbo
Quote from: Webbo on May 03, 2025, 05:52:39 AMYou will be able to cancel orders if the tariff is still in place when the product arrives.
Unless changes occur in the tariffs I can see that resulting in a large amount of unsold finished product :hmmm:
Quote from: Webbo on May 03, 2025, 09:14:21 AMYes, it truly amazes me that Trump thinks the US has been hard done by in its trade/exploitation relationships with pretty well all countries around the globe.
Webbo
Trump just sees the bottom line, the US imports more goods than it exports. Look deeper though and you'll find that even the least we'll off states have a GDP per person around the same levels as the likes of Japan and Germany.
The sad truth is that jobs will be lost and prices will rise. There's no way manufacturing can be rebuilt in the short time between the tariffs being announced and implemented.
He's also missing the other elephant in the room. If overseas companies do shift production to the USA then yes there will be inward investment, but the profits will return to the overseas company - just like the UK.
Even taking into account these ludicrously high tariffs it is pie in the sky to think that manufacturing highly detailed model railway products could ever happen in the USA because even if there were a suitable workforce and it could be trained to the necessary standard (both debatable) the labour cost differential would make products so expensive that few could afford them.
As I understand things, just as is the case in the UK, the skilled workforce capable of such assembly work (as modern highly detailed models require) has never existed so it isn't actually a case of bringing anything back anyway.
My big concern is that if the US model railway market, which is pretty substantial is impacted by these tariffs for any period of time such that sales fall off a cliff (which seems probable), then over-capacity at factories in China will develop. This could potentially make production for remaining markets uneconomic even to the extent putting some brands at risk, for example Kader, parent company of Bachmann US that also produce the UK products too.
Worrying times...
Roy
It is telling that they have to say it is not political. Well, yes it is political but presumably they have to avoid telling their Trump voting customers that they messed up.
Quote from: Paul J on May 03, 2025, 03:52:08 PMIt is telling that they have to say it is not political. Well, yes it is political but presumably they have to avoid telling their Trump voting customers that they messed up.
Yes, exactly. In the same way that the BLI statement had to repeat the Trump lie that this issue is all about "unfair trade practices", which exist only in Trump's head.
The knock on effect is this could also affect second hand prices.
A second hand model that has been selling for £30 could potentially go to £50 as that price still looks good compared to the RRP, when you have someone in the US looking for the cheapest option it can artificially inflate the local price.
Quote from: Webbo on May 03, 2025, 09:14:21 AMYes, it truly amazes me that Trump thinks the US has been hard done by in its trade/exploitation relationships with pretty well all countries around the globe.
Webbo
It frustrates me so much that the U.S. elected someone so inept at...anything. He's just a failed reality TV host. I don't normally spout political opinions out in a public forum but I cannot stand that man. Quite a few of the comments in the manufacturers' posts on Facebook are idiots saying "They can just move the factories to the US!!!". It's not that easy. :headbutt:
The Chinese manufacturers should send their goods to Indonesia or some other low wages country with low tariffs for final assembly, say putting the trucks on or similar and put a stamp on each model, Made in Indonesia.
Quote from: retica on May 04, 2025, 04:14:00 AMThe Chinese manufacturers should send their goods to Indonesia or some other low wages country with low tariffs for final assembly, say putting the trucks on or similar and put a stamp on each model, Made in Indonesia.
Tariff regimes have country of origin rules that prevent that sort of dodge.
They got what they voted for. Fool me once...
Quote from: Paul J on May 04, 2025, 09:26:15 AMQuote from: retica on May 04, 2025, 04:14:00 AMThe Chinese manufacturers should send their goods to Indonesia or some other low wages country with low tariffs for final assembly, say putting the trucks on or similar and put a stamp on each model, Made in Indonesia.
Tariff regimes have country of origin rules that prevent that sort of dodge.
They got what they voted for. Fool me once...
Yep all done to make America great again
Quote from: Jeff_W on May 04, 2025, 03:16:38 AMQuote from: Webbo on May 03, 2025, 09:14:21 AMYes, it truly amazes me that Trump thinks the US has been hard done by in its trade/exploitation relationships with pretty well all countries around the globe.
Webbo
It frustrates me so much that the U.S. elected someone so inept at...anything. He's just a failed reality TV host. I don't normally spout political opinions out in a public forum but I cannot stand that man. Quite a few of the comments in the manufacturers' posts on Facebook are idiots saying "They can just move the factories to the US!!!". It's not that easy. :headbutt:
That's a bit unfair. He's not just a failed TV host. He's had six of his businesses go bankrupt and had 4000 lawsuits against him or his companies over the years. He's a businessman who's very experienced in failures that make him a lot of money.
Quote from: 5944 on May 04, 2025, 11:36:02 AMQuote from: Jeff_W on May 04, 2025, 03:16:38 AMQuote from: Webbo on May 03, 2025, 09:14:21 AMYes, it truly amazes me that Trump thinks the US has been hard done by in its trade/exploitation relationships with pretty well all countries around the globe.
Webbo
It frustrates me so much that the U.S. elected someone so inept at...anything. He's just a failed reality TV host. I don't normally spout political opinions out in a public forum but I cannot stand that man. Quite a few of the comments in the manufacturers' posts on Facebook are idiots saying "They can just move the factories to the US!!!". It's not that easy. :headbutt:
That's a bit unfair. He's not just a failed TV host. He's had six of his businesses go bankrupt and had 4000 lawsuits against him or his companies over the years. He's a businessman who's very experienced in failures that make him a lot of money.
Never let the truth get in the way of a good story :no:
Model railway manufacturers in both the States and the UK, used to make their own stuff, until they found it cheaper to get them done in China. All of a sudden, Chinese factories were copying the basics and no-one could compete.
You have just got to scan Alibaba and you will find plenty of component parts available,
I have tried to get UK companies to machine up components for me, but they are not interested in small quantities.
Quote from: Paul J on May 04, 2025, 09:26:15 AMQuote from: retica on May 04, 2025, 04:14:00 AMThe Chinese manufacturers should send their goods to Indonesia or some other low wages country with low tariffs for final assembly, say putting the trucks on or similar and put a stamp on each model, Made in Indonesia.
Tariff regimes have country of origin rules that prevent that sort of dodge.
They got what they voted for. Fool me once...
I didn't vote for him and it's going to affect me. I hate politics and don't get involved but this issue shouldn't be placing blame on the people who are going to suffer. There are a lot of Americans who are very disillusioned with how our government works that things could even deteriorate to this point (checks and balances my ass). At the end of the day, I don't blame voters who ultimately have to walk a fine line between two incredibly polarized parties. It's a bad situation that perpetuates even further polarization, and personally I think the common people who sit somewhere between the two extremes no longer have the capability correct this course through the election process. So, please do show a little empathy for those who are forced to ride this potentially sinking ship.
Quote from: bigdawgks on May 04, 2025, 02:40:36 PMQuote from: Paul J on May 04, 2025, 09:26:15 AMQuote from: retica on May 04, 2025, 04:14:00 AMThe Chinese manufacturers should send their goods to Indonesia or some other low wages country with low tariffs for final assembly, say putting the trucks on or similar and put a stamp on each model, Made in Indonesia.
Tariff regimes have country of origin rules that prevent that sort of dodge.
They got what they voted for. Fool me once...
I didn't vote for him and it's going to affect me.
As a Brit, I know what it's like, but voters are grown ups and democracy is a collective action. We have had a lot of same problems with high inflation as well without voting for a despot (well, not yet anyway...)
I think this has now run its course so am locking the thread.
Should that not agree with anyone I would ask them to contact Tank