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It looks like the tariffs are being fully implemented. It would seem that this would make all the Chinese pianos cost a lot more, thereby increasing the value of used pianos.

On a side note, I wonder if Brodmann & Kayserberg can handle having to cost so much more in the American market.
Likely to cause inflation and raise most consumer items either way.

Old pianos only getting both older and fewer too.
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Pianos don't all come from China......Japan and Indonesia are still big players, in fact the number of pianos from Japan has been increasing.
Originally Posted by BigIslandGuy
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Originally Posted by LarryK
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Tsk tsk. No politics on PW wink
Originally Posted by Tyrone Slothrop
Tsk tsk. No politics on PW wink

thumb
Originally Posted by Tyrone Slothrop
Originally Posted by BigIslandGuy
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Originally Posted by LarryK
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Tsk tsk. No politics on PW wink

And I agree, this really is not the place for it. My brain said "Just keep your mouth shut" but my hands kept typing. The devil made me do it! smile
My apologies, I was only illustrating a grammatical point. grin

Someone said, you can have friends or you can correct grammar mistakes, but not both.

I think those of us who don’t own a Steinway B have too few pianos in our lives.
Is it the place of manufacture or where the Head Office is based which will have an effect?

Thinking of Essex - made in China, but for a USA company.

Or Parsons Music in Hong Kong part owning KAWAI - which makes Bostons for a USA company in Japan - but also part owns GROTRIAN which manufactures in Germany and China.
Originally Posted by backto_study_piano
Is it the place of manufacture or where the Head Office is based which will have an effect?

Only the place of manufacturing matters. Once anything (parts or assembled products) crosses a border, tariffs are due.
Thank you Ken Knapp! I come to Piano World to escape politics!
BigIslandGuy and LarryK, don't feel badly about having your comments deleted in this thread by a moderator. Some of my comments (which were similar to yours) were deleted by a moderator several months ago in a thread with the exact same title/subject regarding trade tariffs, Chinese imports and pianos. I PM'd the moderator and asked why my comments were deleted. He said they were political. I said the title of the tread in itself is political. He said the issue can be discussed without getting political. Really? Perhaps, but I don't think so...

This entire thread is political in most any context you can slant it in my view and should be removed. Can the subject of "Will tariffs on Chinese imports increase used piano values?" be discussed without alluding to the current political climate or policies in some form or fashion? Maybe it can, but I don't think so...

But proceed on... the mods will need to watch this thread like a hawk because politics will rear its ugly head here again, whether directly or indirectly. But it is up to them to decide whose comments cross the political divide and whose do not...

By-the-way, I think the moderators on PW do a fantastic job and have my utmost respect.

My non-political .02.

Rick
Originally Posted by Rickster
BigIslandGuy and LarryK, don't feel badly about having your comments deleted...


I had comments recounting historical facts deleted from the "What happened in 1980" thread.
Thanks Rick, I’m ok, I knew I shouldn’t have typed that line.

The whole trade and tariffs thing reminds me of a book entitled The World as I Found It, about the philosopher Wittgenstein.

I think the structure we have built around manufacturing and trade cannot be easily changed. I spent four years writing software which modeled container shipping on a global level so I got a chance to see the scale of the system we have built. There are a lot ways that we can all be harmed by a trade war.

I recommend “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger” by Marc Levinson. It tells the story of how one man, Malcolm McLean, changed the world when he took the boxes off of trucks and figured out how to put them in ships, and then got cranes installed in the ports to handle the boxes, and took on organized labor to make all that happen. It’s a fascinating story and a great book.
Originally Posted by malkin
Originally Posted by Rickster
BigIslandGuy and LarryK, don't feel badly about having your comments deleted...

I had comments recounting historical facts deleted from the "What happened in 1980" thread.

We live in a day when facts to one are f**e news to another. Perhaps someday, facts will matter once again.
Just my opinion but I think the China piano industry is big enough and robust enough to casually drop the prices on their US piano exports to pretty much absorb the cost of the tariffs. I guess we’ll see. In my day it was called “playing chicken”.
A couple of quick observations: First (as has been pointed out above), the additional ("Section 301") tariffs on Chinese goods apply to goods manufactured in China (technically "country of origin" China) regardless of where the company is headquartered and regardless of where the goods ship from (Chinese pianos shipped from Vietnam or Taiwan, for example, would still be subject to the duties).

Second, so far pianos have escaped these additional duties. The USTR is currently looking into putting the tariffs on all goods from China, but until that happens Chinese acoustic pianos are still dutiable at the ordinary duty rate that always apples (generally 4.7%). When/if the USTR launches this next round of additional duties, I would assume they will be at 25%.

Larry.
Probably.

We have a recent similar US government intervention in high-ticket consumer goods Case Study via "Clunkers for Cash". That reduced national supply of decent used cars and significantly boosted car prices.
Originally Posted by Retsacnal
Tariffs on Chinese pianos would probably just encourage imports from other places, like Indonesia, Korea, Japan, etc (assuming the tariffs were high enough to make the others more appealing).
Originally Posted by iLaw
Second, so far pianos have escaped these additional duties. The USTR is currently looking into putting the tariffs on all goods from China, but until that happens Chinese acoustic pianos are still dutiable at the ordinary duty rate that always apples (generally 4.7%). When/if the USTR launches this next round of additional duties, I would assume they will be at 25%.

Interesting. I haven't followed this too closely...

4.7 to 25% is roughly a five-fold increase, but about 20% more than before in terms of the rate. Since wholesale price to dealers is roughly half of SMP, than the import cost is even lower, so I'm thinking that this will translate to less than 10% to the end consumer. Not insignificant, but not necessarily a showstopper either.
This is a problem for retailers specialising in Chinese pianos.

Retail margins get crushed unless stores can bump prices up say 10% above the annual "piano inflation rate".

But, stores are struggling as the US piano market shrinks, US wages have been stagnant for decades, and general inflation is pretty high. I just don't see much room for the retailers to pass on the tariff to mid-wage customers who buy these pianos.

Based on simple estimates of these threads:

____________Now___Later
SMP.................100.......100
Cust discount...(20).......(20)
Wholesale cost.(50).......(50)
Added tariff...................(10)
_______________________
MARGIN............30.........20

Somehow after the tariffs, a store's margin will still need to cover: salaries & benefits, rent, advertising, financing, utilities, taxes, profits.

Well, if things get too bad, perhaps Chinese pianos will migrate though a 3rd party country on their way to the USA. As once said in a movie.....Life will find a way...........
IMHO the trick is to find some of the better new Chinese pianos available in showrooms still without the new added cost. They could represent some of the best buys presently on market.

Norbert
Originally Posted by Norbert
IMHO the trick is to find some of the better new Chinese pianos available in showrooms still without the new added cost. They could represent some of the best buys presently on market.

Norbert

How many months inventory do you think are in stores right now?
Just buy a (used) European/Japanese piano, they are better.
Originally Posted by Retsacnal

4.7 to 25% is roughly a five-fold increase, but about 20% more than before in terms of the rate. ...

If the 25% Section 301 duty were extended to Chinese pianos, it would be in addition to the current 4.7% that would continue to apply. So the combined rate would rise to 29.7%.

Larry.
I don't think that the prices of used Chinese pianos will be affected at all. This is primarily because I don't think that any tariffs that are part of this current process will be in place for very long.
For those who are still interested in this topic, the U.S. Trade Representative (USTR) published his list yesterday of the products that are proposed to be added to the products from China subject to the additional 25% Section 301 tariffs. Acoustic upright pianos (HTSUS 9201.10.00) and grand pianos (HTSUS 9201.20.00) are on the new list, as are electric keyboards (HTSUS 9207.10.00), together with musical instruments generally and parts for all of the foregoing (lots of classifications in HTSUS Heading 9209).

A public hearing is scheduled in Washington for June 17, 2019, which is also the due date for submission of written comments in response to the proposal. Unless there is a more general resolution with China that makes these Section 301 tariffs go away, or persuasive instrument importers talk the USTR into removing these items from the list, my guess is that they will become subject to the 25% tariffs somewhere around the end of June.

Larry.
There are so many more used pianos on the market than there are buyers that I seriously doubt that demand could rise enough to significantly affect prices.

As to new piano that are made in China, the overwhelming %age are manufactured by Pearl River, and they are owned by the Chinese government. This assures them of price protection.
Originally Posted by Steve Cohen

As to new piano that are made in China, the overwhelming %age are manufactured by Pearl River, and they are owned by the Chinese government. This assures them of price protection.


That's an interesting comment. If Pearl River dropped their invoice price 19%-20%, the 25% Section 301 tariff would be offset, and of course Pearl River, a Chinese producer, would feel an impact from the tariffs. Which is one of the arguments the government raises in support of these China Section 301 tariffs. I would be very interested to hear whether anything like that really happened, or whether U.S. dealers (and their customers) would simply be left to deal with the 25% increase in landed cost created by the tariff.

Larry.
Originally Posted by iLaw
Originally Posted by Steve Cohen

As to new piano that are made in China, the overwhelming %age are manufactured by Pearl River, and they are owned by the Chinese government. This assures them of price protection.


That's an interesting comment. If Pearl River dropped their invoice price 19%-20%, the 25% Section 301 tariff would be offset, and of course Pearl River, a Chinese producer, would feel an impact from the tariffs. Which is one of the arguments the government raises in support of these China Section 301 tariffs. I would be very interested to hear whether anything like that really happened, or whether U.S. dealers (and their customers) would simply be left to deal with the 25% increase in landed cost created by the tariff.

Larry.


If it happens I will likely be told. I'll try to be "transparent".

Oh yea.....no politics!!!
It depends on what percentage of Chinese piano manufacturing is exported to the US. I’m just guessing here but the biggest impact from tariffs would be all the smartphones, and other electronic devises.
China is a net importer of pianos (i.e. more are imported than exported). And the vast majority of their production is sold domestically.
Originally Posted by Retsacnal

China is a net importer of pianos (i.e. more are imported than exported). And the vast majority of their production is sold domestically.


Yes. Which is one of the reasons why Steve Cohen's comment above particularly interested me. Pearl River might easily be able to absorb a 20% price reduction on pianos to the U.S., thereby negating any retail price increase in the U.S. that might otherwise result from the next round of the USTR's Section 301 tariffs.

Larry.
Originally Posted by iLaw
Originally Posted by Retsacnal

China is a net importer of pianos (i.e. more are imported than exported). And the vast majority of their production is sold domestically.


Yes. Which is one of the reasons why Steve Cohen's comment above particularly interested me. Pearl River might easily be able to absorb a 20% price reduction on pianos to the U.S., thereby negating any retail price increase in the U.S. that might otherwise result from the next round of the USTR's Section 301 tariffs.

Larry.


Yeah, while the import/export numbers may seem high to us, shipments of pianos to the US is probably a relatively small number.
Of course if I was a Ritmuller, Pearl River, or Hailun dealer in the US, I’d be rather concerned.
Even with a 25% increase in price Hailun pianos are still attractively priced.
iLaw,
If a Chinese manufacturer did cut prices on pianos exported to the USA, wouldn't that be considered "dumping"?
Are action parts subject to the same tariff? Are any of you rebuilders concerned about the price of Chinese action parts rising? I have heard that the very popular WNG action parts are made in China. What sort of impact would this have on your business?
Originally Posted by Ed McMorrow, RPT

If a Chinese manufacturer did cut prices on pianos exported to the USA, wouldn't that be considered "dumping"?


Maybe. The test for antidumping is sales at "less than fair value." "Fair value" can be a tricky calculation, however, especially when dealing with goods from countries with non-market economies. Meanwhile, by the way, the foreign piano manufacturers could also be receiving countervailable subsidies from their government.

But U.S. antidumping and countervailing duty laws generally also require a showing that a domestic industry is being injured, or threatened with material injury, as a result of the dumping and/or subsidies. And usually the domestic industry has to step forward and file the petitions, often through an ad hoc industry group expressly created for this purpose.

Larry.
Being owned by the Chinese gov't gives them distinct advantages:

No need to make a profit - need only to employ
Unlimited capital
more.......
Pearl River is no longer owned by the Chinese government, following an IPO in 2012.

That said, it is the biggest manufacturer of pianos in China*, so one would imagine the Chinese government would consider the company's interests to be aligned with its own.

Though, with most of its production (over 140,000 pianos a year!) sold domestically, the effect of US tariffs on the company may not be significant.


*and the world, I understand
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