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TARIFFS – WHERE NOW?
Pinball News
These are strange times for global trade and the imposition of import tariffs. You might almost call them ‘unpresidented’. Except that we’ve been here before, albeit on a smaller scale.
It was back in November 2020 that a dispute about subsidies given to European aircraft manufacturer Airbus led to a trade dispute between the US (home of Airbus competitor, Boeing) and the European Union.
The US imposed tariffs on wine, cheese and whisky, amongst other products, imported from the EU as punishment for what it considered illegal subsidies. In retaliation, the EU imposed a 25% tariff on certain US goods, including pinball machines, entering the European Economic Area. Although the UK had officially left the EU by that point, it was still in a transitionary period where it abided by EU economic policy.
That trans-Atlantic spat lasted until an agreement was reached in June the following year which suspended those tariffs for a minimum period of five years.
However, the dispute demonstrated the then US leader’s expeditious use of tariffs to punish what he perceived as unfair trade practices.
The US President then was the same as the US President now.
Which brings us to 2025 and a much wider use of US tariffs against, well, just about everyone. And, once again, pinball is certainly not immune to the consequences.
Pinball manufacturing, like most manufacturing, is a global business. Even those making games within the US source a large number of their components from outside the country.
There are multiple reasons for that.
Sometimes, those parts are simply far cheaper to buy from other countries. Plastic moulded parts for sculpts or toppers, for instance, may be prohibitively expensive if bought from US suppliers due to labour, material and property rental costs.
Other times, there just aren’t US manufacturers making those specific parts. Microcontrollers, LEDs, display panels, power supplies, and individual circuit board components are all typically sourced from the Far East where the required skills, equipment and raw materials are concentrated.
There are also quality concerns. Wood for pinball cabinets, backboxes and playfield often comes from countries with more northerly latitudes such as Canada, Scandinavia or Eastern Europe in order to obtain the required hardness and grain density. Softer wood would dent more easily, be less temperature and humidity resistant, and show more of the grain through the ink and clearcoat.
Then there is a lack of capacity in the US. Certain products require specialist production techniques which means those businesses are only able manufacture a limited quantity of their products. It would take years of upscaling along with the requisite investment capital and personnel recruitment, combined with the surety of ongoing increased demand to comfortably expand that capacity.
All of which means any increase in existing tariffs or imposition of new tariffs on those products made overseas and imported into the US will undeniably result in increased prices for US-based manufacturers.
Some will already have good inventory purchased pre-tariffs to build their games for the next few months, but companies launching new titles now or very soon will be hard pressed to hold enough stock to completely avoid the new tariffs. Stock requires storage space – which costs money – and also represents capital tied up until the finished product is sold.
Barrels of Fun are in just that position. Their second title launches in around a week’s time, but they say they already have the vast majority of the parts needed to build it, so will be less impacted by the new tariffs. However, even they concede that this position may only be temporary, and they may need to adjust pricing at some point should the new tariffs persist.
Barrels of Fun’s statement
Fortunately, the overall price of a pinball machine is determined by many costs, including staff employment, manufacturing systems, premises costs and promotional activities. So, an increase in the cost of the components doesn’t directly correlate to an equivalent increase in the price of the finished product.
Then there are the non-US pinball manufacturers for whom the US represents their largest single market. Their games, when sold within the US, will attract the new tariffs making their games consequently more expensive in that one country compared to the rest of the world.
Dutch Pinball Exclusive in the Netherlands have already said the price of their Alice’s Adventures in Wonderland game will be 20% higher for US buyers as a direct result of the 20% tariffs imposed on EU products. They have deferred shipments to the US in the hope the tariffs will be removed before those US-bound games have to be delivered.
Dutch Pinball’s statement
Dutch Pinball themselves aren’t increasing their prices to the US or anywhere else, but when their games enter the US a 20% tariff is imposed that somebody has to pay. Not surprisingly, many US buyers with non-refundable deposits are not happy about that ‘somebody’ being them.
At the time of writing there is no word from Pedretti Gaming, Pinball Brothers, Homepin, Hexa Pinball, Bitronic, Vector Pinball or Pinball Adventures about their response to the new tariffs. Many companies are waiting to see what reciprocal tariffs, if any, are imposed on US products before commenting.
If they persist, though, tough decisions will need to be made.
And it may not just be machines being sold into the US which are affected.
As retaliatory tariffs begin to be imposed by other countries on US-made products, the price of some basic pinball components made in the US but used by non-US manufacturers, such as flipper mechs, pop bumpers, ball guides, inserts, balls, legs, side rails, lock bars and hinges, may all rise in price.
As a ‘double-whammy’ for those game makers, they might pay a new import tariff on US-made parts they import to use in their machine, and their complete game is then subject to another tariff if sold back to US buyers.
As we reported several times in the Pinball News and Pinball Magazine Pinball Industry News PINcast, it is little surprise that some European manufacturers are exploring the possibility of assembling games for US buyers within the country to avoid, or at least reduce their exposure to, the new tariffs.
For now, it’s a difficult time for all pinball makers. As with stock markets, uncertainty is the greatest concern. Nobody wants to jump into making a significant investment decision for their business based on new tariffs which could be cut or removed completely overnight with the stroke of a pen on a presidential executive order.
If there’s one thing that’s certain, it’s that nothing is certain any longer.
Continue reading...
Pinball News
These are strange times for global trade and the imposition of import tariffs. You might almost call them ‘unpresidented’. Except that we’ve been here before, albeit on a smaller scale.
It was back in November 2020 that a dispute about subsidies given to European aircraft manufacturer Airbus led to a trade dispute between the US (home of Airbus competitor, Boeing) and the European Union.
The US imposed tariffs on wine, cheese and whisky, amongst other products, imported from the EU as punishment for what it considered illegal subsidies. In retaliation, the EU imposed a 25% tariff on certain US goods, including pinball machines, entering the European Economic Area. Although the UK had officially left the EU by that point, it was still in a transitionary period where it abided by EU economic policy.
That trans-Atlantic spat lasted until an agreement was reached in June the following year which suspended those tariffs for a minimum period of five years.
However, the dispute demonstrated the then US leader’s expeditious use of tariffs to punish what he perceived as unfair trade practices.
The US President then was the same as the US President now.
Which brings us to 2025 and a much wider use of US tariffs against, well, just about everyone. And, once again, pinball is certainly not immune to the consequences.
Pinball manufacturing, like most manufacturing, is a global business. Even those making games within the US source a large number of their components from outside the country.
There are multiple reasons for that.
Sometimes, those parts are simply far cheaper to buy from other countries. Plastic moulded parts for sculpts or toppers, for instance, may be prohibitively expensive if bought from US suppliers due to labour, material and property rental costs.
Other times, there just aren’t US manufacturers making those specific parts. Microcontrollers, LEDs, display panels, power supplies, and individual circuit board components are all typically sourced from the Far East where the required skills, equipment and raw materials are concentrated.
There are also quality concerns. Wood for pinball cabinets, backboxes and playfield often comes from countries with more northerly latitudes such as Canada, Scandinavia or Eastern Europe in order to obtain the required hardness and grain density. Softer wood would dent more easily, be less temperature and humidity resistant, and show more of the grain through the ink and clearcoat.
Then there is a lack of capacity in the US. Certain products require specialist production techniques which means those businesses are only able manufacture a limited quantity of their products. It would take years of upscaling along with the requisite investment capital and personnel recruitment, combined with the surety of ongoing increased demand to comfortably expand that capacity.
All of which means any increase in existing tariffs or imposition of new tariffs on those products made overseas and imported into the US will undeniably result in increased prices for US-based manufacturers.
Some will already have good inventory purchased pre-tariffs to build their games for the next few months, but companies launching new titles now or very soon will be hard pressed to hold enough stock to completely avoid the new tariffs. Stock requires storage space – which costs money – and also represents capital tied up until the finished product is sold.
Barrels of Fun are in just that position. Their second title launches in around a week’s time, but they say they already have the vast majority of the parts needed to build it, so will be less impacted by the new tariffs. However, even they concede that this position may only be temporary, and they may need to adjust pricing at some point should the new tariffs persist.
Barrels of Fun’s statement
Fortunately, the overall price of a pinball machine is determined by many costs, including staff employment, manufacturing systems, premises costs and promotional activities. So, an increase in the cost of the components doesn’t directly correlate to an equivalent increase in the price of the finished product.
Then there are the non-US pinball manufacturers for whom the US represents their largest single market. Their games, when sold within the US, will attract the new tariffs making their games consequently more expensive in that one country compared to the rest of the world.
Dutch Pinball Exclusive in the Netherlands have already said the price of their Alice’s Adventures in Wonderland game will be 20% higher for US buyers as a direct result of the 20% tariffs imposed on EU products. They have deferred shipments to the US in the hope the tariffs will be removed before those US-bound games have to be delivered.
Dutch Pinball’s statement
Dutch Pinball themselves aren’t increasing their prices to the US or anywhere else, but when their games enter the US a 20% tariff is imposed that somebody has to pay. Not surprisingly, many US buyers with non-refundable deposits are not happy about that ‘somebody’ being them.
At the time of writing there is no word from Pedretti Gaming, Pinball Brothers, Homepin, Hexa Pinball, Bitronic, Vector Pinball or Pinball Adventures about their response to the new tariffs. Many companies are waiting to see what reciprocal tariffs, if any, are imposed on US products before commenting.
If they persist, though, tough decisions will need to be made.
And it may not just be machines being sold into the US which are affected.
As retaliatory tariffs begin to be imposed by other countries on US-made products, the price of some basic pinball components made in the US but used by non-US manufacturers, such as flipper mechs, pop bumpers, ball guides, inserts, balls, legs, side rails, lock bars and hinges, may all rise in price.
As a ‘double-whammy’ for those game makers, they might pay a new import tariff on US-made parts they import to use in their machine, and their complete game is then subject to another tariff if sold back to US buyers.
As we reported several times in the Pinball News and Pinball Magazine Pinball Industry News PINcast, it is little surprise that some European manufacturers are exploring the possibility of assembling games for US buyers within the country to avoid, or at least reduce their exposure to, the new tariffs.
For now, it’s a difficult time for all pinball makers. As with stock markets, uncertainty is the greatest concern. Nobody wants to jump into making a significant investment decision for their business based on new tariffs which could be cut or removed completely overnight with the stroke of a pen on a presidential executive order.
If there’s one thing that’s certain, it’s that nothing is certain any longer.
Continue reading...
