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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Thu Feb 16, 2017 9:23 am
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Keep in mind that the current proposal means a 20% tariff on all imports, not just from Mexico. This will also hurt American models, which rely on foreign parts.
Some hope that this will bring more manufacturing back to the US, but there are plenty of resources we just don't have or have in any reasonable quantities, like lanthanoid magnets, rosewood and chromium. These will have to continue to be imported, at a higher cost.


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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Thu Feb 16, 2017 1:19 pm
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arth1 wrote:
Keep in mind that the current proposal means a 20% tariff on all imports, not just from Mexico. This will also hurt American models, which rely on foreign parts.
Some hope that this will bring more manufacturing back to the US, but there are plenty of resources we just don't have or have in any reasonable quantities, like lanthanoid magnets, rosewood and chromium. These will have to continue to be imported, at a higher cost.
All good observations. arthl. It looks like more exceptions or flexible tariff rates like we use between Canada and the U.S. are needed for those limited products. It's inevitable that costs will increase. Just as cheap car prices rise so do the rest. Fewer transportation costs may offset some import costs. My guess is that the Whitehouse will lend an ear to American manufacturers in their attempt to maximize production in the homeland. It's definitely complicated, but not without merit.

If there is any objection to that, one only needs to look at the companies (like majors in the hardware/software/online computing arena) that will not accept a return to the U.S. for a variety of reasons. This is not only because of cheap labour. Corporate tax cuts are frowned upon, yet these companies are afforded those benefits elsewhere, and they reap excessive profits which they claim is lawful and their right to do so. I won't take sides on this except to say that this appears to be one of the hurdles that helps to keep those proposed tariffs high.

I've heard that multiple engineering firms in this country have competition from India that has a firm of approximately 500 engineers at their beckoning to do the ground work which can then be exported over here to a local representative firm. Even though I can't confirm that, it seems plausible, and if we want to compete in North America we need to look at change for the way we do things. Looking at the monopolies around us we are not too far from it. We do run the risk of having our goods being tarrifed out of the global market as well, however. :roll:
I believe that American guitars will always have a market, and my hope is Mexico will too. As far as competing with China, they seem to be taking a different route than Japan did. In less time, Japan went from junk to high quality. China not so much. Japan and Korea have IMHO the potentential to be more of a threat in this area should quality ever be an issue. That doesn't appear to be the trend with the consumer, though. It shows to be a win (cost) / lose (quality) issue most times. Does anyone remember Beta/VHS? One can pay too much, but also too little.

I'm confident that North America does and will compete with guitars and amps whether they're from Mexico or not. I love my American Strat; but, I also know stringed instruments have been made for centuries elsewhere. As far as the raw products being an issue, perhaps a stronger manufacturing market and plausible distribution will give leverage to be applied for decent prices. It can be negotiated both ways.

Maybe, the Grand Wizard sees the future? I can't say; but, there is a lucrative history between resources rich Canada, and our bigger manufacturing brother USA. That alone is a combined competitive edge. Mexico is a bonus. :wink:
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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Fri Feb 17, 2017 3:49 am
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arth1 wrote:
Keep in mind that the current proposal means a 20% tariff on all imports, not just from Mexico. This will also hurt American models, which rely on foreign parts.
Some hope that this will bring more manufacturing back to the US, but there are plenty of resources we just don't have or have in any reasonable quantities, like lanthanoid magnets, rosewood and chromium. These will have to continue to be imported, at a higher cost.


In the end a 20% tariff on all imports would be changed. If the goal was to raise cash, a tariff on everything would be what you were after, but the goal is to increase jobs in the USA. Putting a 20% tariff on things that are not available in the U.S. (rosewood, chromium, etc.) would be silly.

I personally hope a tariff never happens, I don't know of any case were a tariff "saved jobs". The only time I think tariff is merited is when a government subsidizes an industry or product.

There are better ways to bring industry back to our shores, lowering the business tax rate would do wonders, I don't know why business is taxed anyway, business do not really pay taxes, we do. Accounting 101 teaches you that any tax on your business is a cost, and it is built into the price of your product. Of course wimpy politicians love to tax business because it allows them to raise taxes on the poor without them realizing it.

Whatever happens over the next few years, it’s going to interesting………..

8)

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Fri Feb 17, 2017 10:20 am
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omar59 wrote:
There are better ways to bring industry back to our shores, lowering the business tax rate would do wonders, I don't know why business is taxed anyway, business do not really pay taxes, we do. Accounting 101 teaches you that any tax on your business is a cost, and it is built into the price of your product. Of course wimpy politicians love to tax business because it allows them to raise taxes on the poor without them realizing it.


+1000!

No business or company that derives its profits from selling goods and/or services has ever paid a tax -- never have, never will. And the sheeple who believe otherwise are just as ignorant as the political shepherds who lead them.

Arjay

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Fri Feb 17, 2017 1:02 pm
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omar59 wrote:
There are better ways to bring industry back to our shores, lowering the business tax rate would do wonders, I don't know why business is taxed anyway, business do not really pay taxes, we do. Accounting 101 teaches you that any tax on your business is a cost, and it is built into the price of your product. Of course wimpy politicians love to tax business because it allows them to raise taxes on the poor without them realizing it.

dang omar, run for office, I'd vote for you. :lol: You really hit the nail on the head.

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Fri Feb 17, 2017 7:12 pm
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To be completely honest, I hope that it means they come up with more American made lines to cover the gap.

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Fri Feb 17, 2017 10:24 pm
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The fact is that import tariffs did a great job, for a long time, of keeping jobs in America, and keeping out the cheap Chinese crap that has flooded the market. Albeit, some US manufacturing got lax in their quality due to the lack of competition. When we started all of this "free trade" nonsense, we also started to see mass exodus of American businesses and jobs.

Amazing how short some peoples memories are, and the young just simply don't know about the way things were. The mass media just flat out lies about what is reality, and most people get out their spoons and lap it up. :roll:

And no, omar completely missed the nail, and I'm not sure he even has a hammer. :wink:

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Sat Feb 18, 2017 3:08 am
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shimmilou wrote:
The fact is that import tariffs did a great job, for a long time, of keeping jobs in America, and keeping out the cheap Chinese crap that has flooded the market. Albeit, some US manufacturing got lax in their quality due to the lack of competition. When we started all of this "free trade" nonsense, we also started to see mass exodus of American businesses and jobs.


By God, I haven't heard such economic genius since those pajama-clad patriots of the Occupy Wall Street movement dared to leave the sanctity of their parents' basement to brave tear gas and riot police so as to spread the truth about the evils of unrestrained capitalism.

Seriously, this is Nobel Prize stuff.

:roll:

Arjay

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Sun Feb 19, 2017 12:33 am
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When I heard about this 20% import tax it was ONLY on Mexican goods being imported to the USA. The original logic was to use the import tax to pay for "The Big Beautiful Wall" on the border between the USA and Mexico which we were promised Mexico would pay to build. Using an import tax means that instead Americans pay for the wall with higher prices on Mexican goods. Brilliant! Anyway in this thread it seems to have been expanded to ALL goods imported from anywhere and I have not heard anything about that.

An import tax of any amount on goods from Mexico would mean Fender would raise prices to compensate for the tax. In truth their profit margin is not as big as you might think and they are not going to absorb it. Most people do not realize it but the Ensenada Fender compound is much larger, was more costly and has more employees than Corona. Fender Ensenada is in fact far and away the largest guitar and amp manufacturing complex on the continent.

I am already stocking up on Mexican Coca-Cola just in case by some miracle the NAFTA agreement gets invalidated by an executive order, which I am not entirely sure can be done legally.

This could wind up being a two way tax, with stuff going both ways getting slapped with an import tariff. The USA uses their 20% to pay for the wall while Mexico uses their 20% to better train and educate their workforce. WINNING!


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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Sun Feb 19, 2017 8:57 am
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brotherdave wrote:
. . . The USA uses their 20% to pay for the wall while Mexico uses their 20% to better train and educate their workforce. WINNING!

Ay Caramba! Eh?

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Sun Feb 19, 2017 9:28 am
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Si, no bueno When does this take effect, if at all?

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Sun Feb 19, 2017 10:59 am
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Marky Forrest wrote:
Si, no bueno When does this take effect, if at all?


¿Quien sabe?

It's all speculation and bloviation at this point.

I'm hopeful that more reasoned debate prevails and the administration swiftly sees the folly of such action. Otherwise we're likely to see an encore performance of Dubya's imported steel tariff that was imposed in 2002 but quickly repealed less than a year later by congress after hundreds of thousands of Americans lost their jobs.

Arjay

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Mon Feb 20, 2017 9:43 am
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How much is a mim std tele in the US? Was in the shop at the weekend, £503 for a tele here.


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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Mon Feb 20, 2017 10:35 am
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If we don't stumble into war with China, I'd imagine production will just be shifted there. My Fender owned Charvel guitar was built somewhere in China and it's really a sweet ax (I like the EMG's!)! My Epi Wildkat was also built in China, another sweet guitar...

The global economy just shifts production to wherever it's cheaper.

There's a lot of really decent offerings in the ~$500 range and Fender won't be able to let their MIM tele's get too far out of that range.

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Post subject: Re: MIM tax increase Mexican strat, tele 20% tax increase
Posted: Mon Feb 20, 2017 11:03 am
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It's funny you should mention that, since I thought those Fender Modern Player series was interesting and they were made there. I almost got the Dimension Bass they had with that 3-way humbucker pickup, but I went with a Schecter instead.

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