Tariffs and Hi Fi

With sad predictably I note that US CE retailers are now hastily advertising “buy now before the price rises due to tariffs”  … I fear for my friends and colleagues in the United States that their hard fought freedoms and opportunities are being flushed down the toilet of an appalling economic fantasy policy.

It will be extremely hard for a US AV business to adapt to the new supply regime imposed by these extra costs on their product. I suspect that whole categories will disappear from their showroom shelves.  As of today a television at Best Buy will be doubling in retail price when the new tax burden is imposed on the US consumer.

I worry that our beloved premium US brands being Audio Research and McIntosh will suffer local price rises due to their offshore componentry being tariff affected. Although it should be noted that the major offshore componentry in Audio Research are the Sovtek valves which are made in Russia, and therefore oddly exempt from any Trump imbued surcharge.

In Carlton Audio Visual we have always leaned heavily on Australian, European, and Asian High Fidelity products. Perhaps the most serious immediate brands of price volatile risk are the US owned Massimo brands of Marantz and Denon? I really don't know how this will work out. These are core brands for our audiovisual clients and it would be awful if they were locally affected adversely.

Of more concern perhaps to us here in Australia Discretionary Income Land is the effects of a potential international financial crisis caused by the untrammelled economic policy craziness emanating from the United States. We are none of us immune to a tanking stock market chain reaction that limits investment and destroys consumer confidence. 

However we have a fundamentally strong economy in spite of various politicians eager to replace workmanlike pragmatism with populist dogma. Much of our vibrancy and forward looking nature is the essence of that ‘new Australian” populace, who have given up their homelands to come here and have a go and make for a better opportunity for their children.

As I pass forty years trading in Melbourne I find much of the evolved marketplace of Carlton Audio Visual to be the sons and daughters of those who have joined the antipodean diaspora and are now working as the raw professional core of our culture in our institutions of medicine, law, academia, and business. These are the people for whom music and the visual arts of cinema are really an important parts of their life experience, and as such are the most valuable clients of a business such as ours.

Part of this is the new Asian invasion … the people that the Australian populist recidivists would have us believe are a threat ... these are the people who are already well educated and well off and have come to Australia to buy houses and have their children go to private schools and attend our Universities. In my minor experience these are a group that often happily live across the Asia pacific region, they have multiple living opportunities across Australia, China, India, Singapore, Indonesia, Thailand et al, and are able to live where they choose.

This is a wonderful group of people, they are peaceful, productive, and bring fantastic generational opportunity into their chosen habitats. This is an incredible phenomenon that we in Australia need to embrace and accept.

While the United States suddenly builds economic and cultural walls in the fantasy of maganomics, the new Asia pacific hegemony will develop clean energy, self-driving cars, and wonderful cities free of crime and racism and will be able to share its benefits with the European Union in new Free Trade deals that will bring the Silk Road around the planet back to life …

Look I may have gone bit far but … Paul Keating was right. Our future is in Asia … and hopefully Europe … and maybe one day the United States will return to the table and be a part of the brotherhood of trading nations …

Up to now the Chinese High fidelity and Visual display products have been labelled as imitative … however the new brands as exemplified by Eversolo and Wiim and the veritable breaking dam of other original brands at these margins where technology meets art, are without doubt going to be our future.  We can see this happening further up the consumer food chain where brands like BYD and CF Moto have broken through with cars and motorcycles.

There will be casualties I'm afraid, I note that certain technologies in high end AV products may find themselves embargoed into markets as a result of ongoing trade conflicts. For example Sony Video projectors are no longer available in Europe as of last week due to a tech issue. 

On the whole I believe Australia is well placed to ride this one out and we can expect to see an increasing plethora of new technology Asian and European AV products on our shelves at great prices. Let’s hope that we keep sensible democratic governance that deals with the realities of our international relationships ...