Model Railroading > Model Train Tarriffs

Broadway Limited has announced effective Septembe 1, 2019 tarriffs will be added onto Chinese imports. Press release reads as follows:

On September 1, 2019, the US will impose a 10% tariff on Chinese imports which will affect Broadway Limited Imports products arriving on or after September 1, 2019. Please see the table below for the price increases for five projects that have already been announced, but arriving after September 1—HO PRR T1, HO Baldwin Sharknose, HO GG1, HO EMD F3, HO Streamlined PRR K4. This price increase of 7% is effective retroactively, regardless of whether a preorder has already been placed. Broadway Limited Imports reserves the right to make additional tariff-based price increases depending upon delays (manufacturing or otherwise) that push additional previously announced products into the window of the September 1 tariff. Future announcements will have the tariff already factored into the price. 



Edited 1 time(s). Last edit at 08/08/19 07:00 by NYSW252.

That's why they call it "a Hobby". Disposable income.

BLI is engaged in a bit of CYA.  Nothing is certain about these tariffs and whether they will apply to hobby items intended for adults.

The announcement when this last round of tariffs was applied was now ALL goods from China are covered by tariffs.

I started an informational thread about that a few days back and it went political in about 5 posts and was deleted.

I think it's really unfortunate that so much of our hobby and our economy became dependent on a country that in no way shares our values and our freedoms. The Chinese people by and large are great people, but they live under a aweful regime.  If the people of the US truly understood the evils that Communist Part of China has and continues to inflict on it's own people and the rest of the world, the calls for a boycott would be deafening. A regime that lies, cheats and steals every chance it gets. And things are about to take a turn for the worse. The People of Hong Kong were promised a period of self rule for 50 years before being integrated into China after Britian turned over it's former colony in the 1990's. The problem is that Hong Kong has turned into vacation hot spot for people from mainland China. And while there people of mainland China learn of the freedoms enjoyed by the People of Hong Kong and have started to demand that for themselves. China, fearing another Tiawan in the making, have started to tighten the grip on Hong Kong, and that has led to massive protests involving millions of people. Last week Chinese police and military were practicing riot control in an agressive manner, a clear sign of impending crack down on the protestors that may turn into a civil war. The next 5 years may see some major turmoil in the supply chains of many companies, but the short term pain will be well worth it in the end. We really need the diversification of production in nearly everything including model trains.

Ted Curphey
Ontario, OR

Excellent post Ted.   Meanwhile, there are a lot of great model trains already available here in the US, many second-hand yet never used, that will not be subject to any tarriffs at all.

Just think of all the positive implications of Americans buying products made available by other Americans.

PS.  If the tarriffs are never actually imposed, or removed shortly thereafter, will BLI roll back the price increases?



Edited 2 time(s). Last edit at 08/08/19 09:43 by CSX602.

Two quick thoughts about this. First, the major model train manufacturers (Athearn, Atlas, Intermountain, etc) removed the manufacturing years ago from the home country and sent it to China to save their expenses but still manage to reap the benefit of profit. Profit is good as it allows for further development of additional products. Second, this time our hobby will be affected by the tariff plan which I believe will happen. Contrary to the current Washington Administration claim that China pays the tariff - it is the consumer that pays the tariff through a higher MSRP. 

European model train manufacturers use China for their production as well. Any news if they would be affected by what the USA does?

funnelfan Wrote:
-------------------------------------------------------
> I think it's really unfortunate that so much of
> our hobby and our economy became dependent on a
> country that in no way shares our values and our
> freedoms.   ...   We really need the diversification of
> production in nearly everything including model
> trains.

It is unfortunate that so much of our hobby and economy has become dependant on China.  I'm guessing it has come to this because we have decided to sacrifice some values for a better standard of living.  

From what we have learned from Jason Schron, the cost of model trains would be a great deal more than the tariffs are causing if we were to manufacture them here in the good ol US of A.

Diversification of production sounds like it is already happening by what I have been reading in the news.  I've read of some examples already, such as a major bicycle manufacturer pulling out and a few others as well, to deal with the tariffs.

https://www.bloomberg.com/news/articles/2019-06-17/world-s-top-bicycle-maker-says-era-of-made-in-china-is-over

It probably would behove some of our major manufacturers such as Athearn and the like to begin building relationships with factories in other countries and get up and running there so they could pull out of China with a minimual interuption.

There are some models announced that I still would like to add so I'm hoping at the outset I can do that but much beyond that I am reaching a point where I may not need much more.  There is lot thankfully on the secondar market as well.


 



Edited 1 time(s). Last edit at 08/08/19 12:16 by SPDRGWfan.

To be far to BLI, it looks like they are passing on 7% of the tariff and eating the other 3%. Scaletrains eating even more.

ChrisCampi Wrote:
-------------------------------------------------------
> To be far to BLI, it looks like they are passing
> on 7% of the tariff and eating the other 3%.
> Scaletrains eating even more.

Tariffs are on the value of the goods at the point of importation. That is not the domestic retail price/value of the goods.

Ray  

funnelfan Wrote:
-------------------------------------------------------
> I think it's really unfortunate that so much of
> our hobby and our economy became dependent on a
> country that in no way shares our values...

Certainly China's tycoons share our cherished value of self-enrichment, can't fault them there!  



Edited 1 time(s). Last edit at 08/08/19 17:40 by RRBaron.

tramfan Wrote:
-------------------------------------------------------
> European model train manufacturers use China for
> their production as well. Any news if they would
> be affected by what the USA does?

I think what you are asking is if the models from a European model train company imported into the US will be subject to the COO=China tariffs (COO: Country of Origin).

In general, a company cannot claim a change of COO unless there is a significant in-country value added and the HS (Harmonized System) Tariff code of what the company exports changes from what it imports.

In the case of the model railroad products, it's HS Code 9503 xx xx in and 9503 xx xx out.

So, for most European model products made in China, the COO=China designation remains and the importer to the US will have to pay the tariff.

Ray   

I noticed BLI said that it's price increases are retroactive. Is that just for orders made before Sept. 1 and not delivered or effective immediately?

Has anyone noticed the severe devaluation of the Chinese currency? Perhaps China will still be able to import plenty.

Victor A. Baird
http://www.erstwhilepublications.com

Ray_Murphy Wrote:
-------------------------------------------------------
> ChrisCampi Wrote:
> --------------------------------------------------
> -----
> > To be far to BLI, it looks like they are
> passing
> > on 7% of the tariff and eating the other 3%.
> > Scaletrains eating even more.
>
> Tariffs are on the value of the goods at the point
> of importation. That is not the domestic retail
> price/value of the goods.
>
> Ray  



Edited 4 time(s). Last edit at 08/08/19 20:36 by wabash2800.

Ray_Murphy Wrote:
-------------------------------------------------------
> ChrisCampi Wrote:
> --------------------------------------------------
> -----
> > To be far to BLI, it looks like they are
> passing
> > on 7% of the tariff and eating the other 3%.
> > Scaletrains eating even more.
>
> Tariffs are on the value of the goods at the point
> of importation. That is not the domestic retail
> price/value of the goods.
>
> Ray  

Thanks for clarification.

funnelfan Wrote:
-------------------------------------------------------
> I think it's really unfortunate that so much of
> our hobby and our economy became dependent on a
> country that in no way shares our values and our
> freedoms. The Chinese people by and large are
> great people, but they live under a aweful
> regime.  If the people of the US truly understood
> the evils that Communist Part of China has and
> continues to inflict on it's own people and the
> rest of the world, the calls for a boycott would
> be deafening. A regime that lies, cheats and
> steals every chance it gets. And things are about
> to take a turn for the worse. The People of Hong
> Kong were promised a period of self rule for 50
> years before being integrated into China after
> Britian turned over it's former colony in the
> 1990's. The problem is that Hong Kong has turned
> into vacation hot spot for people from mainland
> China. And while there people of mainland China
> learn of the freedoms enjoyed by the People of
> Hong Kong and have started to demand that for
> themselves. China, fearing another Tiawan in the
> making, have started to tighten the grip on Hong
> Kong, and that has led to massive protests
> involving millions of people. Last week Chinese
> police and military were practicing riot control
> in an agressive manner, a clear sign of impending
> crack down on the protestors that may turn into a
> civil war. The next 5 years may see some major
> turmoil in the supply chains of many companies,
> but the short term pain will be well worth it in
> the end. We really need the diversification of
> production in nearly everything including model
> trains.

I agree with you 100%.  Very well said.

Seems before tariffs no one cared about the chinese people, we just wanted our low cost trains. Now that we have to pay tariffs, we want to liberate the chinese people. How? By taking away their jobs and lowering their standard of living.
We will find another oppressed country, maybe Vietnam to build our cheap trains, and forget about the opression they endure, that is until tariffs are put on them.
Then the cycle starts all over again.

Posted from Android



Edited 1 time(s). Last edit at 08/08/19 20:59 by needles_sub.

ChrisCampi Wrote:
-------------------------------------------------------
> To be far to BLI, it looks like they are passing
> on 7% of the tariff and eating the other 3%.
> Scaletrains eating even more.

Maybe, maybe not. Is the tariff on the cost of the item to the manufacturer or the retail price? If the manufacturer pays $100 for the item and then sells it fot $200 the 10% on $100 is $10. The 7% on $200 retail price is $14. Extra profit for the manufacturer / importer in this example of $4 per unit.

Baltimore.



Edited 1 time(s). Last edit at 08/08/19 21:30 by baltimore.

needles_sub Wrote:
-------------------------------------------------------
> Seems before tariffs no one cared about the
> chinese people, we just wanted our low cost
> trains.

People have always wanted to get the best deal they can manage to find.  Groceries, furnature, clothing, what have you.  Speaking of clothing.  We could have a whole related discussion and jocky for the moral high ground about the production of clothing that keeps prices very low.

> Now that we have to pay tariffs, we want
> to liberate the chinese people. How? By taking
> away their jobs and lowering their standard of
> living.
> We will find another oppressed country, maybe
> Vietnam to build our cheap trains, and forget
> about the opression they endure, that is until
> tariffs are put on them.
> Then the cycle starts all over again.

It's pretty easy to define the "problem", but what is the solution.  We can't go to war and "liberate" the oppressed.  History has shown that doesn't usually work out to well.  We could move all manufacture back to the US and pay 2 to 3 times the price for those models.  It countries with lower labor rates there tend to be issues like pointed out above.
 

Tarriff is on the wholesale cost and not the retail value.  If the wholesale cost is $10 and the retail price is $20, the 10% tarriff would equate to a $1 cost for the item to the manufaturer.  Not a major amount on low cost items.  But it will be felt and passed on for higher cost items.

Seems its all one persons fault which it is not as those before him have been afraid to buck the system in which the US is the looser.   We dont charge the same for items coming into our country as they do equil it out.  The whiners want cheep goods at what expense to our economy and jobs. Over here we have people fighting for higher pay over there they just find more to work at lower pay keeping the poverty level high. But hey thats again diffrent, we should not force anything on them that might result in better working conditions for there workers as that would result in higher costs for all of those whiners who dont want to pay higher pirces. So again you cant have it both ways forever.