The US and China Trade War Will Affect Photographers, but When?

The US and China Trade War Will Affect Photographers, but When?

Gear. Photographers go crazy over new lenses, lights, cameras, and all the ancillary parts that go with them. Many of us have added to our bags during this holiday season, and a few are holding off for those big purchases still. What if I told you that the prices of lenses, lights, and other equipment may be going up 25 percent or more in only a few months?

President Trump, as divisive as his term has been for the USA and the world’s political standards, does state a valid reason to some of the policy positions being taken specifically in regards to the business relationships between the USA and China. The political rhetoric may lose some of these reasons in translation but it can’t be ignored, because of the consistent headlines across so much of the media today. US-based businesses lose, maybe more than they gain, by working with China’s manufacturing companies. 

The main culprit in the issue is based on patents and intellectual property (not so dissimilar to the value that many in our industry place on copyrights) and the loss of control over this IP. China routinely requires any company that seeks to use the country's manufacturing businesses to use a joint venture process, which inevitably gives up the control of the intellectual property of that company to China. This is not willful by the company with the intellectual property per se, as China is breaking the rules of being a member of the World Trade Organization (WTO) in this instance. These requirements are usually agreed to in secret to allow the outside company to have access to the lower cost of manufacturing available there while attempting to avoid international penalties from the WTO. Just for US-based companies, this theft of IP is an annual loss of $225 to $600 billion annually according to a United States Trade Representative (USTR) report

With the USA and China being members of the WTO, the USA routinely moves against China in IP and patent theft through WTO's preferred process. Both countries enter into an arbitration period called an MOU (Memorandum of Understanding) for a three-year period while China "attempts" to remove the IP from the marketplace. After three years, the USTR will identify any ongoing violations and another MOU is created and so on and so forth. For those not in a socialist country or familiar with the structure, China oversees all businesses operating within its borders and has the capability to remove a company from the marketplace. Essentially, violators are rarely sanctioned by China, which continues to benefit from the IP theft as a nation (and their sum total GDP), while other countries and international businesses lose significant sums of income due to “knockoffs” and other iterations of products and processes now in China’s hands through the theft. 

Image by Wolfram K (https://www.pexels.com/@wolfram-k-226511), used under Creative Commons.

China has continuously flouted the agreements it’s made to be a part and party to the WTO and its other member countries. That’s a very rudimentary breakdown of the trade issue between China and the US, so the question to ask is: “Why should this matter to photographers?"

In the past several years, many verticals of equipment that are standard in the photographic industry have moved their manufacturing to mainland China. Many creators and artists have rejoiced at the level of gear available to them now that not so many years ago was economically out of reach. The drive down in pricing has been as much due to the lowered manufacturing costs as it’s been to the economics of competition. Some would say that the pricing of certain products, especially from China-based companies, are artificially lower due to the lack of competition within that country while the amount of goods are flooded into the US. These products are then sold against equipment that may have had major research and development costs to absorb in its final pricing to consumers. China and therefore, the companies operating within its borders, have none of these upfront costs to create their goods and therefore lower their own costs, as they can immediately begin the manufacturing process and skip the entirety of development, which decreases the knockoff product's final price. 

It takes time, energy, talent, and a level of determination not many have to create something brand new and see it to market. Some of the best entrepreneurial stories are based around the idea that the entrepreneur has to overcome monetary and personal struggles, including the naysayers, and take sometimes years of research and development for a product to come to market, which may benefit an entire community. There are a number of these types of people in the photographic community, but it also means we see what most likely is stolen IP from companies attempting to piggyback off the entrepreneurs' hard work, and these tools are embraced by many photographers as well. Many times, these products are reviewed and compared to the original and then given a value statement if they are worth the lower cost while deemed that they accomplish a modicum amount of what the original does. That lower cost is built on the back of the original product, and that entrepreneur now has to compete with their very own IP and patents.

This scenario is a reality for many small businesses that need a large volume of product(s) to be manufactured to become a functional and profitable business, as well as to pay for those initial upfront and startup costs. That manufacturing, while required to get the business started and the gear into your hands, may very well make them go out of business eventually. That loss of control over their IP is a part of what the China and US trade war is about.

Currently, $200 billion in imports from China have already had a 10 percent increase in tariffs since the beginning of the trade war this year, with another $267 billion in goods imported from China to be added to the list, with an increase up to a 25 percent tariff coming sometime in March 2019. This date has moved the past several months, but the likelihood of this eventuality is becoming much more cemented in reality as well as the tensions growing between both countries. Unless the US were to back down, the tariffs will go into effect, and an increase in final costs will become our new normal in the US. The other possibility is that China starts to defend IP at its own personal loss, while a majority of products produced within China start to become more expensive to the world as a whole. In this second scenario, photographers everywhere will be paying more for equipment, not just US-based creators. 

Image by Bruce Mars (https://www.pexels.com/@olly), used under Creative Commons.

From century stands, to lenses, to light modifiers, there are not many facets of photography that are not touched by China’s manufacturing. While some equipment will be staying at or near the same price points, because it is imported from Japan, Taiwan, or Switzerland, many other pieces of gear will be going up in pricing if the China and US trade war does not resolve soon or escalates further. Either way, maybe that new lighting kit or modifier setup should be on your list to get sooner rather than later. 

Stay up to date with the current policies by checking the USTR website here

Lead image by Carlos Herrerro, used under Creative Commons.

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38 Comments

Claudiu Ion's picture

"The US and China Trade War Will Affect Photographers, but When?" When? In 10 years. How? In 10 years most of wedding photographers in US will be Chinese.

William Howell's picture

The US will most likely win this skirmish with the Chi-Coms, because we don’t sell that much to them, but they sell a lot to the USA. We are their biggest market by far!

The Chi-Coms thought they were in the catbird seat because of them dominating the rare earth market, but that is changing, right now even as I write this! There is a concerted effort ongoing by three major economic powerhouses to put the insolent Chinese in its place. The Chinese are making enemies all over the earth.

Oh and another US maker of lights has bitten the dust; Lumedyne was bought out by Promark a couple of weeks ago. One of these days I’m going to purchase a Lumedyne rig.

As Dedo Weigart said, it’s not so easy to rip off his stuff, because it ain’t so easy to manufacture. I have read that the Chinese simply cannot create or innovate. So I would say buy lights and grip that are made in your home country, like I try to do.

user-216690's picture

Prediction is hard; however, my general expectation is that the US will be temporarily crippled, and the markets will crash, Trump will be indicted by NY around Feb or Mar, Pence will become POTUS, and a shooting war will start between China and a second order power, which will drag everyone else in.

Regardless of whether I'm right, I would assert we (as a species) are at the beginning of global politico-socioeconomic and environmental inflection points, and it would be a serious mistake to assume a continuation of the status quo.

Time will tell.

William Howell's picture

Umm... you better brush up on the constitution, a sitting president cannot be indicted or incarcerated while in office.
And why or how on earth could America be crippled? I think a lot of people don’t realize just how massive the US is, in every respect and aspect.

Don’t fret everything will be just fine, there is enough of everything to go around.

user-216690's picture

No, you better brush up. There is no constitutional prohibition with regard to indictment of a sitting POTUS; it's DoJ policy not to indict a sitting POTUS. And the pardon power only applies to federal crimes.

I'm well aware of the economic size of the US, I'm equally aware that the only reason economic growth has continued is the belief growth would continue.

I'm not the guy you tell to pay attention to.

Fun fact: the US federal discretionary budget is approximately $1.2 trillion, and the federal government is the largest US employer of civilians - 2.7 million people.

Trump will not get his funding.

And no, everything will not be just fine. It may not play out how I said, but we are screwed on multiple grounds.

William Howell's picture

The president must be impeached, by the House then tried and convicted in the Senate, before anything. If one a president was to be indicted this would be a shortcut to impeachment and removal, thus it ain’t gonna happen. And anyway this president is not going to be impeached, let alone convicted.

Trump may get our wall, the man is a born winner!

user-216690's picture

Your time would be more productvely spent listening to expert analyses, as opposed to making stuff up on the Internet.

I would suggest, in the first instance, the Lawfare and the Rational Security podcasts.

Sean Sauer's picture

Oh, yes I'm so tired from all his "winning". BWHAHAHAHAHA!!!! The only thing dump wins at is showing just how important education is and why we need to spend more money on it instead of a pointless wall. Nearly half of illegal immigrants come the US via plane and last I checked planes fly over walls. Also there's more of a threat from middle-aged white men with firearms than immigrants who actually do more for this country than dump has ever done. OK, back to photography which is what this site is actually for.

William Howell's picture

Ha, ha, ha, good one kid!
I would hope that I’m around when you turn Conservative, but I don’t know you, my Lilly White friend.
Oh and by the way Trump is winning, like a champion!!!

Sean Sauer's picture

You're delusional and dump is not a conservative. He only became one because he knew it was the easiest party to brainwash and control. Trump has been generous with the Clinton Foundation, donating at least $100,000 in the past and is on video talking about how great Hilary would be as a president. Here's a link for you buddy. https://www.youtube.com/watch?v=dtplCupGxZA

If you can't handle facts you can keep on going and being a sheep. Hey, the world needs sheep.

William Howell's picture

If I’m a sheep, I’m an Angora billy goat, producing the softest fur and a mensch with all the lady sheep!
https://www.youtube.com/watch?v=8lGH_DvtBEM

Here you go pal.

Sean Sauer's picture

OK, I will admit that was funny. Have a Happy Holiday!

When the new year begins next week, President Trump will have an acting chief of staff, an acting secretary of defense, an acting attorney general, an acting EPA administrator, no interior secretary, and no ambassador to the United Nations. The officials originally in all those positions have either been fired or have quit in various measures of disgust or scandal. His former campaign chairman, deputy campaign chairman, national security adviser and personal lawyer have all pleaded guilty to crimes. His campaign, his transition, his foundation and his business are all under investigation. The United States’ allies are horrified at the chaos Trump has brought to our foreign policy. The stock market is experiencing wild swings as investors are gripped with fear over what might be coming and what Trump might do to make it worse — a situation alarming enough that the treasury secretary felt the need to call up the CEOs of major banks to assure them that everything is under control.

And, oh yeah, the government is shut down.

Winning what, exactly? Get a grip on reality.

William Howell's picture

The only reason I’m responding to your comment, is that it is well composed and written.
In the history of our nation we have had few seminal presidents and I believe President Trump is one of those few.
To me, everything you write makes me love President Trump all the more, and I vote, do you?
Under the Constitution the President has certain powers and though you may not like President Trump, he is entitled to the same treatment as every President before him!

I appreciate your civility, though I wholeheartedly disagree with your analysis. Your tolerance for Trump's vile behavior baffles me. He is entitled to precisely none of my respect, president or not. Btw .. I stole those fine words (above) from Paul Waldman, at the Washington Post. He deserves the credit. And yes, I vote .. of course! But voting is the least of it.

"Chi-Coms". I have learned a new word.

William Howell's picture

You never the phrase Chi-Coms? Yeah it means Chinese Communists.

Oh yes .. such a useful phrase. So much better than just plain old "Chinese". And I did manage to find someone else who uses that phrase: Rush Limbaugh. https://www.rushlimbaugh.com/daily/2017/04/13/as-i-predicted-the-chicoms...

William Howell's picture

Who’s Rush Limbaugh? I heard the term Chi-Coms back in the early Eighties.
But this Rush guy sounds pretty smart and cool, if he’s quoting me!

Yes . .there's the Chi-Coms, and why not the Am-Caps? Why not be consistent? (American Capitalists). At least you're not using the LibTard phrase, which the moronic right is so proud of. Chi-Coms is just as bad, IMHO. It adds nothing to a discussion apart from a supercilious attitude.

Michael Jin's picture

Can't really tell if this is racist, ignorant, or something else entirely. I suppose "racist" would be the wrong term since Chinese is not a race... What's the word for generalizing a huge swath of a continent and denigrating an entire country of people for no real reason?

I sincerely hope that you're just screwing with us and that you don't actually believe this crap.

William Howell's picture

Hey I’m talking about government, not a people.
Don’t call me racist, because I’m not.

I’m talking trade policy of nation states.
We have had numerous issues with other nations, starting with the UK, way back at the beginning of this country.

Michael Jin's picture

What do you think "the Chinese" are if not a people? What does a government consist of if not people? Does a government exist without the support of its people on some level? It's not like we're talking about a dictatorship where you have armed rebels waging a campaign against government forces. Chinese people by and large are OK with their government for whatever that's worth. Sure they'll occasionally whine and moan just like we do, but they're not exactly dissatisfied to the point where they're plotting some sort of overthrow of it... and why would they? China is doing pretty well for itself right now (then again, North Korea was also doing well for a while before everything went to hell over there).

Also, I didn't call you a racist. Actually, I specifically ruled out the term, "racist", but I wasn't really sure of what the proper term would be in this case. As far as your claim that you're talking "trade policy of nation states", you DID also write this tidbit: " I have read that the Chinese simply cannot create or innovate." and I'm not sure how that relates to trade policy or nation states so why bring that up?

Yeah, you've read it, but what do you think about what you've read in this case? It's such an absurd statement that I'm not sure why anyone would even entertain such an idea... Then again, I remember my Social Studies teacher in high school telling us that "the Japanese are good at copying, but they don't know how to invent anything themselves" so I suppose it's not the type of thing I haven't heard before.

If anyone is making enemies of every nation at this point, it's us. The Chinese have friends—the same friends they've always had. Now, not only are we pushing countries into the Chinese and Russian spheres of influence by effectively removing ourselves from those parts of the globe, but we're also picking fights with the countries who have been our friends to jointly counter nations like China and Russia.

It wasn't bad enough that Obama and the rest of the Western world allowed China to build their little islands (AKA: UNSINKABLE AIRCRAFT CARRIERS) in the Pacific to reduce our influence in that region? Now we've got to squabble with our historical allies over chump change? And yes, compared to the benefits of American influence around the globe that directly results from our military spending, it IS chump change.

This is some real next level stupidity we're engaging in.

------------------

BTW, China isn't actually a Communist state...

William Howell's picture

Thank you for pointing it out that you did not call me a racist, I can assure anyone I’m not. I love all people.
Now, that part about the Chinese, in general, not being creative or innovative, was something that I read in the late Ninties. Doral Corp was granted permission to sell the China space agency rocket technology and it was said that they couldn’t get their rockets to fly straight. And they don’t really have any international scientific awards.
And the Chinese policy of lending money, then entrapping third world countries in debt that they can never repay.This is creating ill will toward the Chinese.

Daniel Medley's picture

Godox. Get yer gear while the gettin's good.

Then just buy Fuji, it's still made in Japan. Jokes aside, the US have been threatening everybody for decades in order to establish the dollar as THE international currency... In this matter I don't see how China can be the bad guys. It's not their fault the US don't produce anything anymore and have relocated everything.

Christian Santiago's picture

Unfortunately not even Fuji manufactures in japan anymore. The XT3 is made in China.

Ken Flanagan's picture

I’m not a fan of political discussion, but would say it’s not really a trade war, but rather an unraveling of some previous poor decisions. Regardless, I think there is going to be an uncomfortable transition, and we will probably see some impacts, just don’t know when.

Michael Jin's picture

Tariffs flying back and forth and high profile corporate executives on both sides being arrested/investigated/held hostage under rather convenient circumstances for leverage is pretty much a brewing trade war. One would think that "an unraveling of some previous poor decision" would involve some level of diplomacy or civil discourse.

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