The Official Sequential/DSI Forum

How the 25% tariff on Chinese goods might affect the synth community

Shaw

  • ***
  • 595
Not trying to start a political discussion here -- this is really posted more for the collective interest in the manufacture of Moog instruments.
Anyway, see attached screen-shot of an emailI just received from Moog (I assume many of you got it too).


... and below is how I replied to Moog:



"Moog Music,


Most of your customers would rather you make your boards, components and synths here in the United States.  Moog is a premium brand, but if you start off-shoring your parts and production, people will start viewing you as competing with Behringer.  That would not necessarily be the best business model.


Regards,


Shaw"

"Classical musicians go to the conservatories, rockīn roll musicians go to the garages." --- Frank Zappa

« Last Edit: June 29, 2018, 03:12:32 PM by Paul Dither »

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #2 on: June 29, 2018, 03:24:07 PM »
Not trying to start a political discussion here --

This is alright in this particular context, as it will affect a great number of manufacturers (many Eurorack makers are also located in the US) and users of the global community, whether one considers oneself political or not.
« Last Edit: June 29, 2018, 03:28:16 PM by Paul Dither »

Shaw

  • ***
  • 595
Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #3 on: June 29, 2018, 03:48:05 PM »
Not trying to start a political discussion here --

This is alright in this particular context, as it will affect a great number of manufacturers (many Eurorack makers are also located in the US) and users of the global community, whether one considers oneself political or not.
I really do hope that Moog (and others) keep as much of their production local as possible. 
Otherwise, what separates them from Behringer?  (Thatís not a rhetorical question... Iím hoping to get opinions here)

"Classical musicians go to the conservatories, rockīn roll musicians go to the garages." --- Frank Zappa

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #4 on: June 29, 2018, 03:52:52 PM »
Not trying to start a political discussion here --

This is alright in this particular context, as it will affect a great number of manufacturers (many Eurorack makers are also located in the US) and users of the global community, whether one considers oneself political or not.
I really do hope that Moog (and others) keep as much of their production local as possible. 
Otherwise, what separates them from Behringer?  (Thatís not a rhetorical question... Iím hoping to get opinions here)

Yeah, Moog, DSI, Buchla, and numerous Eurorack manufacturers are in the same boat here. If you really want a discussion I can also move this topic to a new thread.

Shaw

  • ***
  • 595
Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #5 on: June 29, 2018, 03:57:42 PM »
Not trying to start a political discussion here --

This is alright in this particular context, as it will affect a great number of manufacturers (many Eurorack makers are also located in the US) and users of the global community, whether one considers oneself political or not.
I really do hope that Moog (and others) keep as much of their production local as possible. 
Otherwise, what separates them from Behringer?  (Thatís not a rhetorical question... Iím hoping to get opinions here)

Yeah, Moog, DSI, Buchla, and numerous Eurorack manufacturers are in the same boat here. If you really want a discussion I can also move this topic to a new thread.
That is probably a good idea... no need to clog up the Moog One thread talking about international production pros and cons.

"Classical musicians go to the conservatories, rockīn roll musicians go to the garages." --- Frank Zappa

ddp

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #6 on: June 29, 2018, 04:38:32 PM »
It looks like we're in Off Topic here, not Moog One.  I have written my representatives.  I certainly hope all our friends at Moog, Buchla, and DSI can survive this.
Buchla Music Easel, MP11SE, Moog One, Nord Lead 3, LinnStrument, Polyend SEQ, Live w/ Push 2

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #7 on: June 29, 2018, 08:20:55 PM »
Just curious...is there any reason that they canít use US made circuit boards? Or better still wouldnít this give incentive for a startup company that makes circuit boards in the US if one doesnít exist already?
Prophet 6, Prophet X, Moog Sub 37, Oberheim SEM-Pro, Tempest Drum Computer, Roland V Piano,Kurzweil K2600XS, Roland FA-08, Baldwin Upright Piano, Fender Stratocaster, Fender Telecaster, Gibson Chet Atkins SST, Jackson King V, Ibanez Jem, Roger Linn Adrenalinn iii

Shaw

  • ***
  • 595
Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #8 on: June 29, 2018, 09:03:48 PM »
Just curious...is there any reason that they canít use US made circuit boards? Or better still wouldnít this give incentive for a startup company that makes circuit boards in the US if one doesnít exist already?
Thatís EXACTLY what I was thinking. And they would have more control over QA which hopefully would increase quality.
"Classical musicians go to the conservatories, rockīn roll musicians go to the garages." --- Frank Zappa

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #9 on: June 29, 2018, 09:48:34 PM »
Just curious...is there any reason that they canít use US made circuit boards? Or better still wouldnít this give incentive for a startup company that makes circuit boards in the US if one doesnít exist already?
Thatís EXACTLY what I was thinking. And they would have more control over QA which hopefully would increase quality.

I see this less as a job loss and more of a potential job opportunity. I mean we are already paying $3k plus for synths anyway and with a Polyphonic Moog reaching almost $8k...if 500 to $1000 extra means American Made Circut Boards..well...it just means that the investment is even more worth it.

Iíve seen a lot of guitar companies switching over to overseas pickups...thereís nothing wrong with them but I can tell the difference compared to a D Allen or Loller pickup. I dunno if Iím paying a premium price for an American Made instrument I want it to be completely American made, not assembled in America with cheap parts.
Prophet 6, Prophet X, Moog Sub 37, Oberheim SEM-Pro, Tempest Drum Computer, Roland V Piano,Kurzweil K2600XS, Roland FA-08, Baldwin Upright Piano, Fender Stratocaster, Fender Telecaster, Gibson Chet Atkins SST, Jackson King V, Ibanez Jem, Roger Linn Adrenalinn iii

chysn

  • ***
  • 1075
Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #10 on: June 29, 2018, 09:55:05 PM »
The naive view is that tariffs encourage companies to buy American-made goods because the price of foreign raw materials goes higher. But this doesn't happen because American companies are able to raise prices to the tariff level, and the result is across-the-board price increases, and the protectionist advantage soon evaporates. Meanwhile, since these tariffs apply to raw materials and not finished consumer products, manufacturers are incentivized to move out of the U.S., where they can basically avoid the tariffs for buying materials and selling goods.

I don't think it's particularly important where things are made. As consumers, we're far better off taking advantage of a global economy. This seems so self-evident to me that the decisions of a self-styled "business tycoon" are particularly bewildering. It plays well in Pennsylvania, is all I can think of.
DSI: DSM03; previously: Mopho Keyboard, Desktop Mopho, Evolver, DSM01
Hardware: Eurorack, Arturia MicroBrute
Software: macOS, Ableton, MuseScore2
Modular Grid: https://www.modulargrid.net/e/racks/view/354385
GitHub: https://github.com/chysn

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #11 on: June 29, 2018, 10:42:47 PM »
The naive view is that tariffs encourage companies to buy American-made goods because the price of foreign raw materials goes higher. But this doesn't happen because American companies are able to raise prices to the tariff level, and the result is across-the-board price increases, and the protectionist advantage soon evaporates. Meanwhile, since these tariffs apply to raw materials and not finished consumer products, manufacturers are incentivized to move out of the U.S., where they can basically avoid the tariffs for buying materials and selling goods.

I don't think it's particularly important where things are made. As consumers, we're far better off taking advantage of a global economy. This seems so self-evident to me that the decisions of a self-styled "business tycoon" are particularly bewildering. It plays well in Pennsylvania, is all I can think of.

Again though, Iím not sure why companies canít use American Raw materials or if companies manufacturing the raw materials canít come to fruition.

Itís unimportant where things are made...but it is important what things are made from.

There is a new boutique guitar amp called the Smart Belle..Lee Jackson actually had EVERYTHING that went into that thing, made in America and in some cases custom made by engineers from scratch when parts didnít exist.

My view is this...I would ask Moog why I should buy a Moog over a Behringer? If both companies are using the same overseas boards why should I spend more money on a Moog? A lot of answers would probably include the words ďqualityĒ, ďcraftsmanshipĒ, and the phrase ďsupporting American workersĒ...now apply that logic to circuit boards...
Prophet 6, Prophet X, Moog Sub 37, Oberheim SEM-Pro, Tempest Drum Computer, Roland V Piano,Kurzweil K2600XS, Roland FA-08, Baldwin Upright Piano, Fender Stratocaster, Fender Telecaster, Gibson Chet Atkins SST, Jackson King V, Ibanez Jem, Roger Linn Adrenalinn iii

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #12 on: June 30, 2018, 02:25:19 AM »
The thing is it isn't necessarily the boards, Moog probably do make those. It is the components. If your components are only made in China you get the hit.

Now in the long run the manufacture of these components could be moved to the USA, it is a big job but it could be done. The prices would rise but thats the way of things.

When you have a history of outsourcing, insourcing becomes an expensive change.

My bet is once the price of everything that includes electronic components goes up in the States there may be a rethink.

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #13 on: June 30, 2018, 03:58:47 AM »
Right, it's only about imported electronic components like resistors, tantalum capacitors, LEDs, displays, etc. If you use these and assemble the boards inside the US, you'll get punished. If you continue using these parts and move the production and assembly abroad, you are fine (oh the irony). If you can source equivalents for those parts from the US, you'll more than likely pay more for them. In cases 1 and 3, the customer will have to pay for the increased production costs as well or the manufacturer has to lay off employees to compensate for the increased production costs, so you're basically left with choosing between increased sale prices or unemployment.
« Last Edit: June 30, 2018, 04:50:10 AM by Paul Dither »

chysn

  • ***
  • 1075
Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #14 on: June 30, 2018, 04:28:15 AM »
Again though, Iím not sure why companies canít use American Raw materials or if companies manufacturing the raw materials canít come to fruition.

One of those double-edged swords sort of prevents that: wage expectations vs. price expectations. We want our electronics-rich lifestyles, but we want those things to cost very little.

Quote
My view is this...I would ask Moog why I should buy a Moog over a Behringer?

Why would you ask Moog that question? Try out the instruments if you can, or listen to demos if you can't try them. If you find that a Behringer is as good as the Moog, then buy it. It's meaningless to ask Moog to justify themselves when you should be setting your own criteria for buying instruments.
DSI: DSM03; previously: Mopho Keyboard, Desktop Mopho, Evolver, DSM01
Hardware: Eurorack, Arturia MicroBrute
Software: macOS, Ableton, MuseScore2
Modular Grid: https://www.modulargrid.net/e/racks/view/354385
GitHub: https://github.com/chysn

Gerry Havinga

  • ***
  • 262
  • Really enjoying creating sounds and composing.
Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #15 on: June 30, 2018, 04:53:13 AM »
Why would you ask Moog that question? Try out the instruments if you can, or listen to demos if you can't try them. If you find that a Behringer is as good as the Moog, then buy it. It's meaningless to ask Moog to justify themselves when you should be setting your own criteria for buying instruments.
And don't forget the ethical issues..... Like Behringers business practice of suing people for expressing opinions. This has opened my mind about the possibility of buying a Moog. If it costs more money, the purchase will have to wait a bit.

Running a country based on installing fear in it's population is a much worse strategy ..... Changing trade agreements is quite normal run of the mill practice. In a world economy you cannot blame organizations and countries to try to gain an advantage.

But this doesn't of course apply that much in the field of electronic musical instruments. After all a Moog is a Moog, made in the USA. A Quantum is a Quantum made in Germany. They are not commodity articles, they all have distinct personalities and trademarks. Perhaps it makes sense for companies that produce these kind of specialized instruments to be made exempt of these kind of import (or even export) taxes.
DSI Prophet Rev2 and Evolver desktop, Waldorf Blofeld, Roland System-1, Korg Microstation, Nord Rack 2, Akai S5000, Dato DUO, Elektron Digitone, Deepmind12D, Bitwig v1 and v2. Almost daw-less...

https://soundcloud.com/user-252754541
https://open.spotify.com/artist/1QKocb4H6mNRVJ01qyqd4B

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #16 on: June 30, 2018, 05:10:53 AM »
Again though, Iím not sure why companies canít use American Raw materials or if companies manufacturing the raw materials canít come to fruition.

Because they're either not available or too expensive. In order to be competitive in the electronic component sector you have to manufacture under dumping wage conditions or fully automated, the latter of which entails a technological investment (automatization) that only pays off if you end up producing in large quantities.

Itís unimportant where things are made...

Not really, in most so-called western countries, no one would work for a company producing electronic components that are made under conditions that would keep the sales prices competitive in the end. The according wages wouldn't be worth getting out of bed. So the only realistic alternative is full automatization, which doesn't create jobs and requires a huge market for what is being produced. (This is related to what Bob mentioned about outsourcing and insourcing.)
« Last Edit: June 30, 2018, 05:13:23 AM by Paul Dither »

Gerry Havinga

  • ***
  • 262
  • Really enjoying creating sounds and composing.
Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #17 on: June 30, 2018, 05:21:32 AM »
Not really, in most so-called western countries, no one would work for a company producing electronic components that are made under conditions that would keep the sales prices competitive in the end. The according wages wouldn't be worth getting out of bed. So the only realistic alternative is full automatization, which doesn't create jobs and requires a huge market for what is being produced. (This is related to what Bob mentioned about outsourcing and insourcing.)
I don't think that is entirely true anymore. When Sony took over production of the Raspberry Pi in Wales (UK) they were (and still are) capable of switching real fast between the different PCB designs and components. Of course as you pointed out, it was worth the effort because of volume. But setting up automation has come down in price a lot. Even in the maker world of electronics there is a lot of automatic low cost assembly & 3D printing  and so forth going on.

Perhaps the trade wars will push boutique manufacturers to investigate and work out how to setup small scale automation. The only problem that will stay is how to get the base materials that make up the components. Some of those are only mined in certain parts of the world.
DSI Prophet Rev2 and Evolver desktop, Waldorf Blofeld, Roland System-1, Korg Microstation, Nord Rack 2, Akai S5000, Dato DUO, Elektron Digitone, Deepmind12D, Bitwig v1 and v2. Almost daw-less...

https://soundcloud.com/user-252754541
https://open.spotify.com/artist/1QKocb4H6mNRVJ01qyqd4B

Shaw

  • ***
  • 595
Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #18 on: June 30, 2018, 05:29:04 AM »
The naive view is that tariffs encourage companies to buy American-made goods because the price of foreign raw materials goes higher. But this doesn't happen because American companies are able to raise prices to the tariff level, and the result is across-the-board price increases, and the protectionist advantage soon evaporates. Meanwhile, since these tariffs apply to raw materials and not finished consumer products, manufacturers are incentivized to move out of the U.S., where they can basically avoid the tariffs for buying materials and selling goods.

I don't think it's particularly important where things are made. As consumers, we're far better off taking advantage of a global economy. This seems so self-evident to me that the decisions of a self-styled "business tycoon" are particularly bewildering. It plays well in Pennsylvania, is all I can think of.
This is not necessarily true. I have lived in countries with high tariffs, and locals had good jobs without companies inflating prices for domestic products. Additionally, the country had virtually no homeless population while having no real welfare system to speak of.

Tariffs can absolutely be placed on finished products. Many countries around the world do this today.

Again, I would love to see Moog make 100% American made synths... just as I enjoy my Japanese made Ibanez guitar.
"Classical musicians go to the conservatories, rockīn roll musicians go to the garages." --- Frank Zappa

Re: How the 25% tariff on Chinese goods might affect the synth community
« Reply #19 on: June 30, 2018, 05:37:34 AM »
I don't think that is entirely true anymore. When Sony took over production of the Raspberry Pi in Wales (UK) they were (and still are) capable of switching real fast between the different PCB designs and components. Of course as you pointed out, it was worth the effort because of volume. But setting up automation has come down in price a lot. Even in the maker world of electronics there is a lot of automatic low cost assembly & 3D printing and so forth going on.

Sony is quite a big player, though. I was thinking more of smaller manufacturers and the pressure to produce and sell in large quantities in order to compensate for the automatization investment, which might not be equally lucrative across the board, meaning: certain components that are still being used in synths might not meet the same market size as widely used components for consumer electronics like tablets, etc.

Perhaps the trade wars will push boutique manufacturers to investigate and work out how to setup small scale automation. The only problem that will stay is how to get the base materials that make up the components. Some of those are only mined in certain parts of the world.

Indeed. And many boutique manufacturers might not have the resources to even think about small scale automation including sourcing alternatives for base materials.