Sunday, July 29, 2018

Brief Breakdown of Hobbies and the Trade War Tariffs

  1) Most manufacturers of both toy soldiers and model trains are inextricably locked into Chinese manufacturing.

2) The days of low prices for Chinese-made hobby goods ended about ten years ago.

3) A trade war with high tariffs on Chinese hobby goods (20% to 30%) will jack prices 25% to 35%. The extra 5%  is the cost of re-pricing, producing new price lists, additional customs costs, etc. Your $450 locomotive is going to cost $550 to $650. Your box of soldiers is going to go from $15 to $20.

3) Lionel Trains has started making some of its goods in North Carolina. Tim Mee is made in the USA. AIP has moved back to the USA. Hasbro is backing out of China.  MTH, Bachmann, RMT, BMC, LOD, and most of Lionel is made in China. While some production could be moved to Korea, it will still be a costly thing. Moving production will require retooling, setting up facilities, hiring and training staff, etc. That takes time and money.

4) Everything is going to be utter chaos until the dust settles.

5) Either way, you (the hobbyist) lose.

The manufacturers should have heeded a time-honored piece if advice:

Don’t put your eggs in one basket!