At least initially, you're going to see some contradictory and seemingly wrong responses to the recently announced tariffs. Without revealing too much in confidential information, in my talks with various companies I'm aware of three different seemingly contradictory things that will happen in the short term (at least if everyone keeps to their current plans):
- Prices drop on some cameras. This is most likely with older gear where inventories may already be present in the US, particularly if it's still sitting on dealer shelves.
- Someone eats the tariffs on some cameras. This seems to be the case with a few products for which pre-orders have been taken, but which will actually arrive in the US after the date the tariffs are supposed to go into effect. No one would tell me who will eat the tariff, though. There's some likelihood that's still being negotiated.
- Prices will rise on some cameras. This is most likely for products where supply is barely (or not quite) meeting demand, and for products not yet announced.
It seems evident after talking with a half dozen folk at different companies that no one is completely sure of what they'll do long term. At the subsidiaries, they all need buy in from Japan on what they'll do. At the camera companies themselves, they also need to know what their country will do in response to the US tariffs, which is currently not known. At the dealers, they all need clear word from the subsidiaries as to what happens next. Inventory already in the US seems like it will simply continue to go according to plan. Inventory not yet in the US is where everyone is contemplating what to do.
What's happening already is a total disruption in business planning. What's going to happen next is that new product introductions are going to slow down, as the business assumptions upon which they are premised are no longer in place, and getting a specific ROI on something new is now more difficult. What I suspect will happen is that the Japanese companies will de-prioritize US as an outlet for their product and let prices fall where they fall here, while more directly targeting markets where they don't have this newly imposed tax.
For instance, China. For some time now China has been becoming more important to the camera makers than the US once was. Today, Chinese tariffs on cameras made in Thailand is 9%. The US tariff for that is now 36%. [source: World Integrated Trade Solution database] The real question is whether the Chinese economy is healthy enough to support a bigger push of product from the camera companies. Cameras are bought with disposable income, and that's not growing the way it used to in China. Indeed, the impact on China of the US tariffs is going to challenge the Chinese economy, just as it will the US.
Trump has called his efforts a Trade War. Indeed, he's using Emergency Powers normally only used in time of war to impose his tariffs. As in any war, people are going to get hurt. Businesses are going to get hurt. And in the end, war only ends by complete conquering—which is not a possibility in this case, as the US is too dependent upon global trade, services, and investment—or by a negotiated cease fire. Predicting either is currently impossible. Which is why businesses are scrambling to just figure out how to survive.
Bottom line: short term camera pricing won't seem to make a lot of sense. If the tariffs stay in effect for any length of time, the only choice will be to accept a smaller US market buying at higher prices.
If you want good news, I suppose it is this: Japanese companies such as Nikon have survived earthquakes, tsunamis, floods, nuclear meltdowns, pandemics, and complete product transitions (and that's just in the last 13 years!). I have little doubt they'll survive tariffs, too, though the other large part of their business was also hit by technology export restrictions. While I chide the bean counters in Tokyo fairly often, they have managed to figure out how to sustain their companies through some pretty horrendous situations. But what survives may not be everything you want to survive.
