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Will the trade war affect DJI?
1764 34 2018-7-6
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OneDoesNotSimply
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Does anyone know if the pending tarrifs on China will affect DJI? I know they use a lot of American designed components. Interesting how they cancelled their announcement for later this month a day before the tariffs took effect. Hopefully imports of drones are not part of this stupid trade war.
2018-7-6
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A CW
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Shipping costs have just been increased in the UK and massively in Europe so I guess it's already starting.
2018-7-6
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SparksBird
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Yup already seeing it as DJI has increased shipping costs.  They have to put the increased pricing somewhere.  
2018-7-6
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DJI Wanda
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The proposed tariffs by Donald Trump on US$60 billion worth of Chinese products were also designed to counter the threat of China emerging as a major technology competitor, the official said. Mr. Trump signed off on the measures, including hefty tariffs on Chinese goods, targeting what he called Beijing’s economic aggression following a six-month-long investigation under Section 301 of the Trade Act of 1974. Concerns have been mounting in the US over Chinese state influence and bias against foreign investors in China’s hi-tech industries. However, for us in DJI, we do not have yet a written or verbal confirmation about this issue. But you may notice the sudden changes. We will keep you updated once we have the announcement.
2018-7-6
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SkyBug
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Can’t wait to see the price on the next release..
2018-7-6
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Aardvark
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A CW Posted at 2018-7-6 05:25
Shipping costs have just been increased in the UK and massively in Europe so I guess it's already starting.

Very much more than proposed, they came into effect at midnight Washington time.

And Londons answer:-

https://www.bbc.co.uk/news/uk-england-london-44737293

Edit:- I wonder if there will be TFR in place :-)
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A CW
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DJI Wanda Posted at 2018-7-6 05:53
The proposed tariffs by Donald Trump on US$60 billion worth of Chinese products were also designed to counter the threat of China emerging as a major technology competitor, the official said. Mr. Trump signed off on the measures, including hefty tariffs on Chinese goods, targeting what he called Beijing’s economic aggression following a six-month-long investigation under Section 301 of the Trade Act of 1974. Concerns have been mounting in the US over Chinese state influence and bias against foreign investors in China’s hi-tech industries. However, for us in DJI, we do not have yet a written or verbal confirmation about this issue. But you may notice the sudden changes. We will keep you updated once we have the announcement.

Thank you very much for that update - appreciate it. $60bn... OMG!
2018-7-6
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A CW
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Aardvark Posted at 2018-7-6 06:33
Very much more than proposed, they came into effect at midnight Washington time.

And Londons answer:-

This has actually been officially approved to fly over London during his visit - can you imagine his face!
2018-7-6
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3-D
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A CW Posted at 2018-7-6 06:44
This has actually been officially approved to fly over London during his visit - can you imagine his face!

That's mean.

Hilarious, but nonetheless, mean.   
{3-D starts looking into UK citizenship}
2018-7-6
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A CW
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3-D Posted at 2018-7-6 06:54
That's mean.

Hilarious, but nonetheless, mean.   

I agree - as funny as it is I don't think it's appropriate given his position. I can't see it taking off though as there will be a lock down on air space within miles of his position.
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3-D
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A CW Posted at 2018-7-6 07:13
I agree - as funny as it is I don't think it's appropriate given his position. I can't see it taking off though as there will be a lock down on air space within miles of his position.

I agree.  I'm not going to turn this into a political rant, but I'll just say this.  As an American, I will always respect the Office.  Not always the person who holds it.  I have a fundamental disagreement with the current administration.  But the fact is that he is currently the president, and therefore must be treated as such.
2018-7-6
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ny300z
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love my DJI drone but love my country more so I could care less what happens.
2018-7-6
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A CW
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3-D Posted at 2018-7-6 07:39
I agree.  I'm not going to turn this into a political rant, but I'll just say this.  As an American, I will always respect the Office.  Not always the person who holds it.  I have a fundamental disagreement with the current administration.  But the fact is that he is currently the president, and therefore must be treated as such.

Very true! I don't think it's appropriate.
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3-D
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ny300z Posted at 2018-7-6 07:55
love my DJI drone but love my country more so I could care less what happens.

And since you already have your drone, the increase in DJI prices probably won't affect you!
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Kingram
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ny300z Posted at 2018-7-6 07:55
love my DJI drone but love my country more so I could care less what happens.

I agree 100 percent I love my country more and I want fair trade and I haven't purchased my new Drone yet and I'm willing to pay a little more I also respect the office and the current President.
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ny300z
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3-D Posted at 2018-7-6 08:06
And since you already have your drone, the increase in DJI prices probably won't affect you!

haha exactly, plus I wont mind the increase when I get a new one either. Some things are worth it to me.
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ny300z
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Kingram Posted at 2018-7-6 08:40
I agree 100 percent I love my country more and I want fair trade and I haven't purchased my Spark yet and I'm willing to pay a little more I also respect the office and the current President.

Couldn't of said it better myself! I welcome the increase for the end result we want.
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LoSBoL
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DJI will be affected by the tariffs because drones are on the published tariffs lists. I do think DJI will cushion the effect by both the rest of the worlds drone market, as well as taking a lesser margin on drones sold in the US, they may get a bit more expensive, but it sure wont be 25%.
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WebParrot
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FWIW I checked the list on the State Department filing (that has the list - starts on page 14 -  .... the only direct product(s) listed are Batteries.  As with most items -especially where raw materials are included, but the specific item isn't listed- it's difficult to tell.

This is a PDF of the Trade Offices filings.  Some 1300 "items" ... of particular notice... there will be a tariff on sewing needles too!  Quilters beware!  [Page 33, item # 84523000

The types of batteries are listed at the lower third of page 42 starting with item 85064010 and covering everything from Silver oxide, Lithium to NiCad and Lead Acid.  Mostly affecting automobiles and larger storage batteries.}


301FRN.pdf (509.23 KB, Down times: 2)
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LoSBoL
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WebParrot Posted at 2018-7-6 10:53
FWIW I checked the list on the State Department filing (that has the list - starts on page 13-14 -  .... the only direct product(s) listed are Batteries.  As with most items -especially where raw materials are included, but the specific item isn't listed- it's difficult to tell.

I'm afraid they are on the list, as you can see in a previous topic

https://forum.dji.com/forum.php?mod=viewthread&tid=152752
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WebParrot
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LoSBoL Posted at 2018-7-6 10:58
I'm afraid they are on the list, as you can see in a previous topic

https://forum.dji.com/forum.php?mod=viewthread&tid=152752

Thanks for the back-link... Hadn't gotten to that thread yet!
I'm CLEARLY no expert!  I got this list from an acquaintance in government and her take is that you need to know what components are in a product to know whether it's on the list.  There may be matching quad components listed  (LED's for example) or some kind of circuit board that is universal for anything from automobiles to clothes washers.  You just don't know (as a manufacture) unless you compare your parts with the "list(s)"  It's way more complicated that we -or the news readers- can comprehend.

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A CW Posted at 2018-7-6 06:44
This has actually been officially approved to fly over London during his visit - can you imagine his face!

Can you imagine Prime Minster's or Royals' faces; if I as U.S. citizen pulled similar stunt?  
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WebParrot
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Aardvark Posted at 2018-7-6 06:33
Very much more than proposed, they came into effect at midnight Washington time.

And Londons answer:-

Yea!!  And it's filled with special "hot air" [ the hot air of a liar has larger molecules allowing objects to remain airborne longer ;~~) ]

I also enjoyed the accompanying article comparing him with Past President Millard Fillmore - how apt.
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WebParrot
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HedgeTrimmer Posted at 2018-7-6 11:11
Can you imagine Prime Minster's or Royals' faces; if I as U.S. citizen pulled similar stunt?

Just as long as they don't start "letting out the gas" over Parliament ;-)
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A CW
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HedgeTrimmer Posted at 2018-7-6 11:11
Can you imagine Prime Minster's or Royals' faces; if I as U.S. citizen pulled similar stunt?

Not really as people wouldn't dare - especially as the latest addition to our Royal family is American.
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LoSBoL
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WebParrot Posted at 2018-7-6 11:09
I'm CLEARLY no expert!  I got this list from an acquaintance in government and her take is that you need to know what components are in a product to know whether it's on the list.  There may be matching quad components listed  (LED's for example) or some kind of circuit board that is universal for anything from automobiles to clothes washers.  You just don't know (as a manufacture) unless you compare your parts with the "list(s)"  It's way more complicated that we -or the news readers- can comprehend.

Sadly It's just not merely drone components that are affected, complete consumer drones fall under HS code 8802 11 00 (Helicopters, with an unladen weight not over 2,000 kg ), you can see proof of that they fall under that HS code in the topic mentioned, and sadly, they are on the 301FRN tariff list. /

(you can also find the suspected quad component HS codes that are affected in that topic)
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miketmtpro
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Every POTUS has talked the talk about fair trade for decades, and none have done anything about it. Campaign football that gets kicked around because too many long term public officials had inside deals.

How will things affect the market? Look at history. I've been involved with consumer electronic retail for decades. What were once top brand names in US, most are gone, or had been resold to overseas mfg's that use a trademark name (familiar to US consumers).

Samsung was a tiny electronics company in the 80's. They basically made the first disposable TV's. Were priced 40-50% cheaper than RCA, Magnavox, Zenith and even Sony. Consumers decided the cheaper TV was the one to buy. Who cares if it breaks, buy a new one.  Then enters KMC built by Gold Star which is now LG.

Domestic answer from major mfg's was to move product factories to Mexico. That brought some pricing down, but the quality dropped tremendously. Enter Mitsubishi and Pioneer in the high end products as well as mid range.  

EPA and other changes impacted the parts makers, distribution and factories heavily. Companies that made semiconductors, resistors, caps, and so on basically said screw that and moved overseas. Many cities in the midwest that manufactured components simply vanished what seemed like overnight to many.

The other big issue was the infrastructure. Businesses no longer wanted to pay the cities for infrastructure upkeep. Many companies were told relocation to asian areas would have brand new high tech infrastructure like they had never seen before. Investors went full in, and leaders were given tidbits of what was going on no doubt. RCA (Thompson CSE), NAP Philips (Magnavox/Sylvania,Philips), Zenith, as well as other smaller entities like Emerson, LLoyds and small dime store product makers fled quickly. Most went out of business eventually and sold their naming rights later. Consumers like familiar names.

Fast Forward to today and the big consumer companies are LG, Samsung, Sony, Pioneer, Vizio, maybe toss in Panasonic. Very very few service facilities. Everything is basically disposable.

The last POTUS simply said "those jobs are NEVER coming back" and that did not sit well with a lot of US citizens. Could those jobs come back? What would it take? For leaders speaking as I watched CSPAN coverage a few times on trade deals, many on both sides discussed fair trade policy, but most sat on their hands.

Prices of products will likely go up some if tariffs are raised. If that is what it takes to rebound some of the domestic employment  options and manufacturing base in the US, then most people would probably go for it. Would I pay more for products to have domestic product options as well as employment opportunities for people who need them? yes.

My parents have old toasters from Sunbeam made in the 60's that still work. Same brand imported low cost stuff today might last 3 years. Then it hits a landfill.
Gas and oil go up and most just go "ohh well, not much to do about it".... Not only did that happen, but nearly every food product went up, containers got smaller as well. Some said to save costs and make shipping easier... nobody said "wait that is less product now costing more" and there was no outrage either. Media mostly didn't care to run a story. We get gouged in oil prices over a simple pimple of a threat in the ME and speculators go wild. Crazy stuff mostly ignored. DJI drone price going up due to import costs and the sky is falling when it hasn't yet and not one person has seen any new cost margins to even consider really.






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Oracle Miata
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Can we not make this a political thread.  Especially preachy multiple paragraph opinion pieces.
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dwin1977
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If DJI were to put some manufacturing in the US, would they get around the tariffs? I think that's the whole idea (in my layman's perspective).
2018-7-11
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OneDoesNotSimply
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I wonder how much manufacturing you would have to do to qualify. Could they ship over a bunch of major components - already completed arms, chassis, covers and flight controllers then just have them assembled here? Or would they actually have to make the arms and electronics assemblies in the US?
2018-7-11
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DrawsWithLight.co.uk
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miketmtpro Posted at 2018-7-6 11:33
Every POTUS has talked the talk about fair trade for decades, and none have done anything about it. Campaign football that gets kicked around because too many long term public officials had inside deals.

How will things affect the market? Look at history. I've been involved with consumer electronic retail for decades. What were once top brand names in US, most are gone, or had been resold to overseas mfg's that use a trademark name (familiar to US consumers).

Relocating manufacturing from China back to the US is all well and good but the reason Chinese products are so much cheaper is their low labour rates. The hourly rate for a factory worker (depending on which data you look at) in China is about $3.50 compared to the US which is about $21.50. You're either going have to pay much much more for your products made in the US or reduce the wages for factory workers considerably to compensate for the dramatic increase in product cost.
2018-7-12
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miketmtpro
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DrawsWithLight.co.uk Posted at 2018-7-12 02:36
Relocating manufacturing from China back to the US is all well and good but the reason Chinese products are so much cheaper is their low labour rates. The hourly rate for a factory worker (depending on which data you look at) in China is about $3.50 compared to the US which is about $21.50. You're either going have to pay much much more for your products made in the US or reduce the wages for factory workers considerably to compensate for the dramatic increase in product cost.

Well, Apple has returned some of it's mfg to US, and so are other co's. It will be a while before US domestic consumer electronics co's have enough incentives to be in the US. Most of these companies are leaning AI and not really human production. Lots of robotics.

Consumers would probably do ok knowing their sons and daughters, friends and family can find employment by simply paying 10-15% more for products to cover labor increases. When that cost is leveraged against higher tariffs for imports, things will average out and that would be incentives for companies to mfg domestically again.

Consumers now are basically being gouged by co's even with mfg bases in China. Costs are not the issue as much as the investors won't yield 300% returns. China's low labor rates will increase as well. That is one of the major fears in the trade deals. China's own laborists are not loving the fact they work as cheap. In many products price increases have reflected increase labor costs in those countries.

tariffs are not balanced at all, but can play a major role in how the nation's trade more fairly. Perhaps China and other nations will lower their tariffs on US imports.

All I can say is initially it may cost 10% more for some products, but if that employs more people domestically then I am ok with it. Imbalance of trade has been a huge problem for decades. Every yokel brings it up, none do anything about it.
2018-7-12
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Bob Brown
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I am OK with paying more for the Mavic 2 when it is available if it means the USA gets to win and trade is balanced out amoung the countries. I love my country and have to say I love yours too! China, EU, UK, Germany, AU, Israel, Japan ... yer all humans and Jesus commands us to LOVE one another.  Trump is a business man first and the President. I am sure he knows what he is doing and I wont pretend to; so far so good.


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DrawsWithLight.co.uk
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miketmtpro Posted at 2018-7-12 14:21
Well, Apple has returned some of it's mfg to US, and so are other co's. It will be a while before US domestic consumer electronics co's have enough incentives to be in the US. Most of these companies are leaning AI and not really human production. Lots of robotics.

Consumers would probably do ok knowing their sons and daughters, friends and family can find employment by simply paying 10-15% more for products to cover labor increases. When that cost is leveraged against higher tariffs for imports, things will average out and that would be incentives for companies to mfg domestically again.

An increase of 10-15% is a bit optimistic I would have thought. The difference between the Chinese labour rate and the US based on the figures I quoted is 515%! We're only talking about 1 product here too, don't forget you'll need to add the ambitious 10-15% increase you quoted to all other imported products you purchase on a day-to basis.

2018-7-13
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miketmtpro
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DrawsWithLight.co.uk Posted at 2018-7-13 00:52
An increase of 10-15% is a bit optimistic I would have thought. The difference between the Chinese labour rate and the US based on the figures I quoted is 515%! We're only talking about 1 product here too, don't forget you'll need to add the ambitious 10-15% increase you quoted to all other imported products you purchase on a day-to basis.

I think there are many in the US that would option for price increases if it means fair trade globally.

I'm a musician as well, and I would pay more for gear of all kinds if it means those products are also made here in the states, and can compete well for my $ vs imports. Domestic companies like Gibson, Fender, PRS, Peavey, etc have all had to relocate in order to compete with other markets. Some may recall the Undercover Boss episode with Hartley Peavey years ago. He announced many terminations and changes to product lines that would have to be made over seas in order to compete with similar companies. Dude took a beating in forums, boycotts, etc. He was just doing what it took by the people that advise them how to stay afloat. Fender moved a lot of the company to Mexico. Carvin closed recently because it simply could not compete with pro audio electronics made and assembled in China. Even though boards were made from asian builders and parts mfg's, Carvin would not leverage sales enough to maintain the pro audio division. just how it was.

The simple threat of tariff increases had China drop their rate 10% in US imported cars. The part I look forward to more is at least having the real discussions. Non domestic competitors have had a distinct advantage for quite some time.
2018-7-13
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