Making Your Streaming Gear Purchases Before Higher Tariffs Kick In
America just had a historic election. The President-Elect has talked repeatedly of sweeping change, massive deportations, and even completely changing how the federal government works by removing anyone who isn’t of the same mind and replacing them with like-minded servants. He has also talked about jailing those who crossed him and aiming multiple gun barrels at his opponents. Like all rhetoric, it mostly serves to motivate those who would be interested in seeing such hasty action. In reality, the wheels of government change move slowly.
It's akin to a company in trouble bringing in a dynamic new CEO who promises to make the company great again, but is then slowed by the inherent inertia in the company itself, like multi-year agreements that put enormous weight on a company and can't be tossed off like James Brown's dance cape at a stage show. The promise of sweeping dramatic improvements ends up, instead, as smaller changes that can be implemented while waiting for the opportunity to make larger changes. We've seen time and again that the wheels of change move slowly.
One of the items that may change quickly, though, in the case of the incoming presidential administration is the promised foreign tariffs. Tariffs don't cost foreign companies a penny, but cost Americans a small (and often not so small) fortune in increased costs. That's just the way tariffs work. The factory has already made the items and shipped them. The tariff is added to the cost of the items here, in the U.S., and ultimately the purchaser pays it.
Do you have a plan to purchase electronics and other gear in 2025? You may want to accelerate those purchases to the end of 2024 because President-Elect Trump demonstrated in his first term that he had no issue with dramatically increasing the cost of appliances for Americans with previous tariffs, so there's no reason to expect him not to do it again. He's already said he would, this time with higher tariffs, which in turn means higher-percentage price increases for American consumers. He may have promised to “lower prices” on the campaign trail, but he did the exact opposite while in office the first time, and his primary means of achieving those price reductions will have the opposite effect. As always, that’s what tariffs do.
The issue for live streaming producers who depend on a lot of gear to do our jobs is that nearly everything we use or need is made overseas and will likely be subject to these high tariffs. This means paying higher prices for cameras, computers, laptops, ethernet switches, streaming appliances, wireless headsets, microphones, and even the HDMI, SDI, and Ethernet cables themselves. If it's made in Germany by Sennheiser it might be exempt, but nearly all of your technology hardware is manufactured where manufacturing and labor are cheapest and tariffs are most likely to be imposed.
With the CHIPS and Science Act, President Biden invested federal funds in the process of bringing core electronic manufacturing back to the U.S. Texas Instruments received 1.6 Billion in federal funding to on-shore chip manufacturing in Sherman, Texas. The result, as we have already noted, is a slow process that involves building new manufacturing facilities, getting them staffed and up to speed, and getting that hardware out to the industries that need it. TI plans to have produce approximately 93 percent of its semiconductors solely in the U.S. by 2030, which is still many years away.
That means there's no short-term solution to sourcing locally produced production gear. What you can do as a video producer, to steel yourself and your business, is to plan ahead and make early investments in technology. Where do you see the company going in the next 2–4 years? What will you need to get there? What resources do you already have? What will you need to acquire? Will you be able to afford it with the price hikes that come with tariffs?
By understanding the inevitable impact of the promised international actions, as well as the impact of those that have been executed before, you can understand what is to come and take action to avoid the increased costs as best you can.
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19 Nov 2024