While trade tariffs may seem appealing to nationalists, in the long term, a trade war will damage the economies of all countries. Here are the main reasons photographers in America and around the world might not welcome them and why you might consider buying camera gear now.
An Easy Guide to Global Economics
The Trade Deficit 101
America has a powerful economy; in 2023, it represented about 26% of the world’s trade when measured against Gross Domestic Product (GDP). However, it also has a trade deficit. Put very simply, that means it buys more goods and services from other countries than it sells. No country in the world wants to be in that position. Nevertheless, out of around 200 countries, just under 60 have a trade surplus, and most are tiny economies; those surpluses are minuscule.
The balance of trade between two different countries is known as a bilateral trade deficit. It’s easy to assume that if Country A exports more to Country B than B to A, it is bad for B. However, this notion is rejected by economists for a raft of reasons. Not least, goods and services are often produced through complex global supply chains. Therefore, a trade deficit with one country might reflect trade surpluses with others involved in a production process. For example, a Ford F-150 has components made in Canada, Mexico, China, and Thailand.
Moreover, trade balances are influenced by a wide range of other factors, such as national saving and investment rates, exchange rates, and a country’s overall economic growth. If you are interested, there are plenty of online articles on that matter.
GDP 101
We measure our economies’ performance by Gross Domestic Product (GDP). It represents the total value of all goods and services produced by a country over, usually, a year. GDP is increasingly seen as a poor measure of economic performance because law enforcement, prisons, fire services, hospitals, lawyers, the judiciary, drug rehabilitation, the military, and many other services are included in its calculation. Those are indicators of a troubled society. A country could be war-torn, with very high crime, extraordinary levels of violence and murders, and poor population health, yet produce few tangible goods—but its GDP could still be high.
Short-Term Benefits of and Long-Term Detriments of Tariffs
Despite all that, it is tempting to put tariffs on incoming goods. In the short term, it redirects a country’s population to spend their money away from buying imported goods to either saving or buying domestic products.
There’s a problem, though. As we have already seen, other countries will retaliate. Therefore, a country’s exports will also be affected.
Let’s say the USA hits Europe with higher tariffs. Inevitably, Europe will retaliate with similar charges against imports from America. Furthermore, European businesses will seek alternative markets and start trading more with Asia, Australia, Africa, and South America, all of which will start trading more with each other instead of America, whose goods have become more expensive. Although the USA is the world’s largest economy, worth about $29.17 trillion, the rest of the globe has an economy of over $73 trillion. When they start trading more among themselves, that will inevitably impact exports from America.
Once each economic area has found those alternative markets and those markets are seen as more stable and trade-friendly, businesses are most likely to stick with their new partners and not go back to trading with America.
What Does This Mean for Photographers
From a photography perspective, it’s not going to help American brands. We live in a global market, and American manufacturers do not have a monopoly on high-quality camera bags or tripods. Those of us who live overseas will buy from elsewhere. There are some excellent products from American companies, including GoPro, Peak Design, Tiffen, Kodak, and Blackmagic Design, whose exports will be hit by retaliatory tariffs. I am a big fan of some of these manufacturers, but if their prices escalate, people in other countries will go elsewhere.
Although the tariffs may be a boon for American producers in the home market in the short term, there are photographic products that America does not produce. Those prices will go up. Is there an American company making flashes ready to compete with Godox, Neewer, Metz, or Profoto?
Of course, American companies could develop these products for their domestic market. Lensbaby could take over the area of the American market held by 7Artisans and TTArtisans. If so, tariffs might help them in America, but their exports will still be hit by the reciprocal tariffs from the rest of the world.
Moreover, developing a new product takes time, money, and expertise.
There is another side to this, too. As I mentioned earlier, many products are built from components and materials originating from a number of different countries. So, those components will be hit by tariffs as well.
A Lesson from Brexit
Isolationism is never good. Bloomberg stated that Brexit is costing the UK economy £100 billion a year, and the economy has shrunk by 5%. Here, we have suffered what is described as a cost-of-living crisis. Brexit has been a major contributing factor to that.
If America overturns trade agreements with its partners, one can expect the economy there to suffer. Prices here are 25% higher now than they were before Brexit, and it caused food prices to increase by 6% from 2020 to 2022. Brexit also saw a drop in the pound’s value by 18%, so imported cameras in the UK increased similarly.
History has repeatedly shown that any move to reduce free trade between nations hurts the country’s economy. But as one wise man said, the one thing we learn from history is that we never learn from history.
Should You Buy Now?
This is all basic common-sense economics you probably learned in school. But why is it a good idea to buy photography gear now? The simple reason is that the products sitting in the shops now were imported before the tariffs were imposed. If you are considering a purchase, grab them now before the prices rocket.
