A while back there was a thread in which I, in part, touched on the potential for a price increase due to increases proposed between the U.S. and China in their ongoing trade conflict. One poster, seemingly in the know at the time, implied that there would not be any such tariffs imposed on model trains as they are such a limited circulation item. At the time I didn't feel that was likely to be true, but let it drop.
Now, this afternoon, I've received an e-mail directly from Con Cor Trains addressing tariffs that I've reproduced here.
How Will new Trade Tariffs affect Model Trains?
From Jim Conway, Con-Cor Trains:
We already have been asked by a few people if Model Trains will be
affected by the new China Tariff Structure.
While all the dust has not settled as yet, the short answer is YES,
it will raise Model Train retail prices in the USA.
Any shipment that left China after 12:01 AM Sat May 11th will be charged the 25% Duty rate by U.S. Customs when it hits U.S shores. (Shipments already in transit will not be affected.)
For example, if an American importer had a contract with a Chinese factory to make a locomotive for say $100.00 each, U.S. Customs has to be paid another $25.00 before that locomotive is allowed entry into the US. So now that $100.00 loco costs $125.00 to the USA importer.
If the importer already has established his retail price for that locomotive, now its cost has gone up 25% and more than likely the manufacturer will have to adjust his previously advertised price for that model upwards. The profit margins on model trains are not as large as the average model railroader thinks, Importers will not be able to absorb a 25% increase in cost and stay in business.
Bad news? Yes in the short term, but Trump is trying to prove a
the point, and that is the Chinese cannot continue to steal our patents and ideas and use them freely.
We at Con-Cor have had that happen to us the past, we have come up with some good ideas and novel ways to improve models, passed those along to a China Mfg to be used in "our" products, only to see the SAME IDEA turn up in Competitors products made in the same China factory within a few months.
By stealing ideas and innovations and low balling labor cost. China has forced just about all USA mfg of model trains to close over the years. and maybe as many as 1,000 people have lost their jobs at those model train factories.
So now China has a monopoly on the model train market here and has been able to raise its export pricing 30-40% over the past 5 years, while their actual "costs" have only gone up maybe 10% over those same 5 years.
They are doing exactly the same in many other industries.
I have visited China maybe 20 times and have seen the changes over
time, they are very arrogant about stealing and copying other people's ideas.
All the best, please enjoy the summer
Jim Conway
Con-Cor Trains
I guess that it proves once again that hobbyists should never say never in model railroading as disturbing developments seem to pop up at the most unexpected times. Bottom line - anticipate very likely paying considerably more for you locos and rolling stock in coming months than you've been used to.
CNJ999
Now, this afternoon, I've received an e-mail directly from Con Cor Trains addressing tariffs that I've reproduced here.
How Will new Trade Tariffs affect Model Trains?
From Jim Conway, Con-Cor Trains:
We already have been asked by a few people if Model Trains will be
affected by the new China Tariff Structure.
While all the dust has not settled as yet, the short answer is YES,
it will raise Model Train retail prices in the USA.
Any shipment that left China after 12:01 AM Sat May 11th will be charged the 25% Duty rate by U.S. Customs when it hits U.S shores. (Shipments already in transit will not be affected.)
For example, if an American importer had a contract with a Chinese factory to make a locomotive for say $100.00 each, U.S. Customs has to be paid another $25.00 before that locomotive is allowed entry into the US. So now that $100.00 loco costs $125.00 to the USA importer.
If the importer already has established his retail price for that locomotive, now its cost has gone up 25% and more than likely the manufacturer will have to adjust his previously advertised price for that model upwards. The profit margins on model trains are not as large as the average model railroader thinks, Importers will not be able to absorb a 25% increase in cost and stay in business.
Bad news? Yes in the short term, but Trump is trying to prove a
the point, and that is the Chinese cannot continue to steal our patents and ideas and use them freely.
We at Con-Cor have had that happen to us the past, we have come up with some good ideas and novel ways to improve models, passed those along to a China Mfg to be used in "our" products, only to see the SAME IDEA turn up in Competitors products made in the same China factory within a few months.
By stealing ideas and innovations and low balling labor cost. China has forced just about all USA mfg of model trains to close over the years. and maybe as many as 1,000 people have lost their jobs at those model train factories.
So now China has a monopoly on the model train market here and has been able to raise its export pricing 30-40% over the past 5 years, while their actual "costs" have only gone up maybe 10% over those same 5 years.
They are doing exactly the same in many other industries.
I have visited China maybe 20 times and have seen the changes over
time, they are very arrogant about stealing and copying other people's ideas.
All the best, please enjoy the summer
Jim Conway
Con-Cor Trains
I guess that it proves once again that hobbyists should never say never in model railroading as disturbing developments seem to pop up at the most unexpected times. Bottom line - anticipate very likely paying considerably more for you locos and rolling stock in coming months than you've been used to.
CNJ999