Well. Here we are. The first wave of tariff shock came rolling in. Leica prices in general jumped by anywhere from 10% to 20% and the tariff contagion spilled over onto my Leica-loving Canadian friends as well. Seems that the US is the North American distribution center for those German products and since all Leicas come in here first before some are sent on to Canada everything gets hit with the same increases.
I guess today is the day to bitch about how sad and depressing my life is on May 2nd. I had to pay bills today. I paid off the balances on my credit cards. But I do that every month. I set aside money for property tax --- the tax that never sleeps --- and a bit more for federal income taxes, paid my swim dues, my concierge doctor's monthly charge, the gas bill, the electric bill, water bill, the various phone bills and internet bill, club dues, made my usual donation to the household account and, finally, paid my gardener. Woe is me. So sad.
But the thing that really chaps my hide is the idea that, going forward, when I need a little pick me up from Leica -- say a new M11P or a nice lens to fend off the economic blues I'll not only have to save up extra couch cushion change to cover the new tariffs but I'll also be participating in the "world economy" in which, under our current administration, the US dollar has dropped in value by about 9%. If you add the 10% increase in the cost of German retail therapy from tariffs to the 9% drop in the value of the dollar against the Euro it means I'll be paying about 19% more than I would have for my emotional support camera gear if I'd bought it just a few months ago.
But it's always good to remember the current mantra: "Tariffs are not a tax on American Consumers!" My grasp of macro economics is far from sterling but these price increases sure feel like a new tax to me...
I read that three of Fuji's most popular cameras; the new GFX RF, the X100VI and the XM-5, all of which are manufactured in China will no longer be imported into the USA. Too expensive now to sell to a shrinking market of people with less disposable income. So, bit by bit our choices will become more limited than ever before. Not just too expensive but literally, physically unobtainable.
I guess I need to starting cutting costs where I can. Using the coffee grounds two or three times before composting. Move my grocery shopping from Whole Foods to Walmart. Switch from French wines to, gasp! Texas wines. Bust out the dial up modem. Pull the ole flip phone out of a dusty drawer. I've never had them but I'm sure I'll miss those opera box seats I've always had my eyes on...
On a serious note I think the financial pinches caused by the tariffs will be really hard on lots and lots of Americans who plainly never signed up for this. Economists are forecasting rolling shortages of foods, medicines and all kinds of staples. The last time I was at a Trader Joe's I noticed people now stocking up on toilet paper. The food banks are already starting to feel a recent surge of newly food insecure families. And with the Canadians responsible these days for a large share of our oil and gas supplies I can only imagine they'll be retaliating in kind and driving our gasoline prices to well over $4 a gallon. "What????" my European readers might say. "Did you mean $4 per liter???" Yes, we're spoiled but we've got lots of space between our homes and everything else and a lot of black top we've already payed for that someone has to use....
Unhappy to know that we live in a country where it's okay for school children to go hungry so billionaires can skirt paying taxes. And now the Leicas..... It's just too much.
You are right. Many lower income families will find it harder to buy food and basic household goods.
ReplyDeleteWhat if some of the maga guys have to cut back on driving their blingy he-man trucks? Gawd, they'll have to cut back on family groceries.
I sympathise, hope this is a short and temporary aberration; I fear not. What a mess!
ReplyDeleteI have nothing against being rich, but the rich get much of their money from investments. If you hold stock for a year, your tax rate on any profits is 20%, less than a lot of working people pay. If you hold stock-paying ("qualified") dividends for a few months, your tax rate is also 20%. And they **want to cut that** and replace income tax with tariffs, with what amounts to a sales tax, one of the most regressive taxes you can find. And for the really rich, a common dodge is to "borrow" money from a big bank, using stock as collateral, and you don't pay any tax on loans. That can go on for years, or even forever, if you're rich enough. Whenever you have a lot of stock, and are widely diversified, you're going to have some losers. After a few years of "borrowing," you can dump your losers (and pay no tax at all on the money you collect) and pay off your "loans" and so never pay any tax at all, while living quite well. Or beyond quite well. I'm so disgusted by this stuff I can barely think about it anymore.
ReplyDeleteWell put, Kirk. I too am a semi-retired commercial photographer with a weakness for Leica gear. I did acquire that M-11P about few weeks ago. I let the pending tariffs push me to the store counter. I tell myself that’s the last of my big gear purchases. Maybe this time for real. I have dear friends in Canada who forgive me my Americanness. They caution me that things will get worse. While I agree, I hope for the best. No one shooting Leica rangefinders can earn sympathy.
ReplyDeleteToo bad that all Leicas pass through an American port or you could have taken a Leica buying vacation to Canada when the urge struck. Sneak the new one back in at the border in your camera bag, in plain sight, among your other gear. I have been seeing ads for Lindt chocolates that mention that they will be importing their delicacies direct to Canada to avoid US tariffs. Maybe Leica could piggy-back on Lindt's deliveries to Canada. Buy an SL3, get a chocolate bunny as bonus. I make light of this but it's not the least bit funny. Drunken bar talk elevated to government policy.
ReplyDeleteBy refusing to setup a Canadian distributor, even on a temporary basis, Leica is basically cutting off 10% of their potential future business. It's like telling California to go f**k off. Not a great business decision. Canada has a free trade deal with the EU. It seems Leica could setup the German distributor to handle this current situation but the US distributor has blocked it. Canadian's aren't as bellicose as their southern neightbors but they have very long memories.
ReplyDeleteNot sure Leica sees it that way. I think everyone's supposition is that Trump will back down as soon as the red states realize how fucked they are. And start screaming really loud. He'll claim victory and end this particular madness then move on to the full invasion of Switzerland or some other nonsense and then everyone will get back to business as usual. Well, except for the Swiss. But really, which camera did your ten percent in Canada want that isn't currently back-ordered at Leica? Can't sell what you haven't made yet... And if you can't sell it then there are no tariffs.
DeleteThe tariff--driven rise in Leica prices (or all cameras for that matter) immediately makes them less affordable. Add in a cost of living increase as a result of tariffs, the reality is even less disposable income as people pay more for basics, so that new camera of any brand is even less affordable, or in reach.
ReplyDeleteStill, all the camera manufacturing companies in the US must be jumping up and down with delight as their home-grown products get a price advantage. Oh wait...