Global Tariff Fears Cause Panic in Audiophile Industry at AXPONA 2025

Ask a finance expert and they will tell you that nothing upsets markets more than uncertainty. Nearly every Millennial was too young to experience the 2008 recession, and yes, it has been that long. Other countries, many without the low-cost labor found in the United States, went into a recession because of the COVID-19 pandemic, yet, the U.S. quickly rebounded.  Things have been good economically in the United States for an abnormally long time. The audiophile industry does not feel that this trend will to continue from what was said at the recent AXPONA show outside of Chicago.

This long-running economic stability may end in 2025, because of high tariffs on countries ranging from our enemies to allies to uninhabited islands (read more about that here from The Guardian). Proposed and/or actual tariffs range from 10 percent to 145 percent (China). Tariffs on NAFTA partners like Mexico and Canada have been most shocking, as many of the most tempting U.S.-made products need parts often made in Canada and Mexico. In reality, these same finished products rely even more heavily on parts that come from China, thus the cost of the American finished goods have no option but to be more expensive. And at AXPONA, now the best event in the United States, these tariffs had audiophile companies in full panic mode for understandable reasons.

Why Are Audiophile Companies Freaking Out So Hard Over the New Tariffs?

No matter what political affiliation an audiophile is, he knows that most of the products that he buys are physically made in China or, increasingly, Vietnam. A lot of enthusiasm and wonderment has been put into the concept of Chi-Fi (Chinese-made high-end audio gear that doesn’t suck that sells for impossibly low prices), and those low prices just went up because of self-imposed sales taxes on the American people. But Chi-Fi isn’t the end of the conversation, because the best factories in the world for audiophile components are located in China and Vietnam. Simply put, unless you are buying Rolls Royce-level products (think: handmade by artisans in an expensive locale), the chances are that your next audiophile upgrade component will be made in China or at least sourced with parts from the country. Now those products are being taxed to the consumer at over 100 percent.

Why are heavy tariffs on Vietnam such a big deal? Vietnam (read more from the Los Angeles Times) isn’t just where most of your clothes come from (for me, even my favorite golf shirts tend to come from the Asian nation), but it's also where nearly every AV preamp or AV receiver is made. It pains some Americans to know that the Chinese factories are often superior to domestic ones at delivering better quality at lower prices. Environmental regulations in China are low (if any). Labor costs are a fraction of the “low” that we have in the United States, yet the quality of the products from China and Vietnam are notably high in the modern era. When was the last time a Bluesound Node or a pair of Bowers & Wilkins headphones didn’t work perfectly out of the box? Even with the well-publicized yearly seasonality of the Chinese workforce (they go home at New Year’s after working for 11-plus months in a factory), the quality of Chinese-made audio gear is of remarkably high quality in 2025. Global companies have taught these factories how to make low-cost, high-quality products for a global economy. Companies from other countries are taking advantage of these tariffs. Look at Saudi Arabia, which has tried to “sports wash” their murderous actions (source: BBC) with their disastrous LIV golf tour. They are also trying to negotiate political outcomes as Switzerland did in the past, and handing out investment money to companies to buy odd yet compelling properties like the app-based game Pokémon Go for $3,500,000,000 (source: BBC). Knowing where millions of people are at any given time is compelling to countries that are Making Themselves Great (for the first time).

What Will a $1,000 Audiophile Subwoofer Cost Because of Tariffs?

No matter how you voted or why, the prices of the audiophile components that you want for your next upgrade are going to be a lot more expensive. Tariffs paused or not, the instability in the economic market is going to be a genie that refuses to go back into the bottle. Any “paused” tariff can come back in the blink of an eye. No responsible businessperson, regardless of party affiliation, can ignore this level of instability, yet few audiophile companies could make their products in the United States as quickly or for anywhere near the same prices. That’s a tough spot for these businesses after having it very good for more than a decade.

One speaker company that is most concerned about tariffs on Chinese-made goods used a $1,000 audiophile subwoofer (retail) as an example. That subwoofer, with 100 percent tariffs (they are reportedly now higher, although “paused”), would not just cost 100 percent more. As one of the best speaker marketers in the history of audio told me at dinner during AXPONA, you can’t forget that, to survive, these audio companies need to add their margins on top of the new prices.

So a $1,000 retail-priced subwoofer will now retail for in the $2,250 to $2,500 range if the tariffs are not formally and permanently revoked.

That is a big increase in price by anybody’s standards.

For younger audiophiles and AV enthusiasts, there is one commonality that they will all share with you when asked … They all demand high-value products when investing in audiophile gear. That value that they demand just vaporized for products that people can live without. Audiophiles can live without a pair of killer new subwoofers, but they might not be able to live without a washer/dryer or some other durable goods item. Expect demand for audiophile gear to reduce, as you think back to the “guns and butter” example that we all learned in Econ 101. In a most simplistic explanation, when prices go up, demand goes down. Prices just went up big-time, and there is a finite amount of budget for most people involved in the hobby. This is exactly how a recession can start and we are way overdue, even without tariffs to destabilize the global economy.

What About the “Pause” on the Current Global Tariffs?

Much as Bill Clinton’s early economic plans were curtailed by the bond market, so are the current administration’s moves to jack up tariffs on both friends and foes alike. If one wanted to make the argument that these tariffs were needed to pay down the national debt, for example, people might be willing to come together to work towards a common goal. That would be a move towards unity over division, but that would be a move I wouldn’t hold my breath to ever see. The taxes imposed on consumer goods like audiophile products don’t go to pay for any such forward-thinking program of lower debt. Thankfully, the bond market speaks more loudly than the dark money-powered groups (source: The Guardian). That is where the 90-day pause of tariffs comes from that we see today. The pause does nothing to assuage the fear and instability in the market. Wanna know why we are in trouble? Look at your 401K. Are you better off now than you were four months ago (to modernize and shorten the timeline on a famous Ronald Reagan quote)? Not many can say yes.

The big problem is that, even if the tariffs go away at the end of 90 days, the damage is already done. Canadians are selling their summer homes in places like Scottsdale and Palm Springs. Air travel from Canada is down roughly 70 percent to peak COVID numbers (source: USA Today). Denmark, the political protector of Greenland, which we are threatening with stripping of their sovereignty, also isn’t traveling to the United States much, either. How many parts of the U.S. economy rely on tourism, specifically summer tourism, to be profitable? Now, millions of people are looking to any number of other locations to travel to where they can spend their money – none of which are in the United States. That is not good for our economy, and wasn’t a necessary pawn in this political game.

What Happens to American-Made Audiophile Goods Sold in the Global Marketplace Going Forward?

Two years ago, I visited some audiophile companies in Colorado right before the CEDIA trade show in Denver. At the YG Acoustics factory, I was treated to a VIP tour of their American factory. They make all sorts of ultra-cool audiophile gear right here in the Lower 48 with cutting-edge, computer-driven machines that impressively spit out amazing metalwork that is the basis of their drivers and cabinets alike. Not many audiophile speaker companies make their own drivers in the United States, but YG does, which is absolutely impressive.

When I was there, I saw no less than six of their nearly $250,000 subwoofers being crated for international shipment. It was a jaw-dropping sight that got me to ask where seven figures worth of subwoofers were going. You guessed it – China. You bet YG had a good month back in 2023. Will they be able to repeat the sales performance with double the retail cost? We are about to see.

Even the most conservative economists warned about retaliatory tariffs as an economic war like this ends in mutually assured destruction. CNBC reports that China has upped their tariffs on American-made products, predictably, to 125 percent (total - read the story here). Can the one Chinese man who bought over $1,000,000 in audiophile subwoofers afford to pay double? Likely yes, but would he? We will see how that plays out in the coming months and years as demand for needlessly expensive export products makes U.S.-made audiophile goods less attractive in terms of price.

The world of high-end audio sales on the very high end is not solely consumed by American customers. Asia is the biggest consumer of most American-made audiophile components now, but will that continue?  Japanese consumers love American-made gear like McIntosh and Krell (or D’Agostino these days), just as we love some Sony, Luxman, Accuphase, STAX, and so on. Chinese consumers buy a ton of our uber-high-end, hand-crafted gear. The Middle East is another big yet emerging market, too, with the E.U. still a big player in purchasing American-made audio gear. Experts are sounding the alarm bell, as everyone involved (willingly or unwillingly) is going to lose in this trade war, as top economists have warned (read more from Yahoo Finance here).

So, What Comes Next for the Audiophile Industry Regarding Tariffs?

The current administration prides itself on being unpredictable and it is possible that some countries can come in to cut their best deals now. Japan is already first in line to do that, and they are smart to make an offering. Countries that figure out how to deal with the current administration will have better outcomes.

Powered by the bond market and its bigger-than-country power, perhaps cooler heads can prevail. Can this recession be avoided? That’s highly unlikely at this point, but a recession is a normal outcome in a healthy, long-term economy. They come about every six to seven years and are important corrections to a market. We haven’t had one in 17 years, which might be why Warren Buffett, the Oracle of Omaha, is sitting on a mighty pile of cash right now. Perhaps when Buffett starts buying back into the market, that will be a very good sign that cooler heads have prevailed. Respectfully, we are not there yet, but we all should be prepared.

How Will Audiophile Companies Cope with Pending Tariffs?

Panic isn’t going to help anybody, but panic is what we saw at AXPONA from a few companies that are seeing their globalized supply chains fall apart.

There just aren’t American factories to make the products that mainstream audiophile and home theater clients want to buy right now, nor will many new ones open in time to fend off the effects of the tariffs. Companies are buying up as much inventory as possible in the short term but, much like during the Pandemic, consumers are also snapping up as many foreign-made products as possible with unquestioned price increases pending.

If you are funded and in the market for an audio-video component – now is the time to plunk down the platinum card. Like, right now. One German company told me that they had 10 components left of their only Chinese-made product and that they were going to suspend selling that product for the time being, as they couldn’t easily or economically import more. They sure as hell can’t make said product in Germany with the cost of labor and materials as a consideration long before any pending or proposed tariffs.

Now is the time to buy what you might need for your system before, overnight, it becomes double (or higher) the price.

American audiophile retailers are in a panic as well, as they know that, with prices double or more for their goods, consumers simply will not be able to double down on discretionary goods like AV gear. Shortages during the COVID-19 pandemic made used items like automobiles skyrocket in value. The same could happen in the audiophile world. A $10,000 amp at retail might have cost you $5,000 when you bought it used, but if the retail price goes to $20,000, your amp could be worth much more. Perhaps the coming months will be a good time to restructure your system and its configuration.

Recessions Offer Both Pain and Opportunities …

Recessions are needed in a healthy long-term economy. Those audiophile companies that understand that recessions are painful but can have long-term benefits will be the best off going forward. Those companies that are cutting their marketing in a recession allow others to easily eat up their market share. A recession is the best time to promote one’s brand, even if the concept is a little bit counterintuitive. Look to invest your audiophile upgrade budgets into products from companies that are looking to the long-term future, not the ones hammering on the panic button.

This is a good place for audiophile and home theater enthusiast consumers to invest in these needlessly uncertain and upsetting economic times.

What will you buy (if anything) if things keep progressing as they have in the global economy with mutual tariffs? Is there anything that you might sell or a possible restructuring of your system? What are your next moves? Comment below.