Tariffs and The End Of Affordable Computing w/ Steve Burke

In this episode, Ed Zitron is joined by Steve Burke of GamersNexus to talk about how tariffs are throwing the PC gaming industry into disarray, and how the era of affordable computing is coming to an end. GamersNexus: The End Of Affordable Computing: https://www.youtube.com/watch?v=1W_mSOS1Qts&t=2s&ab_channel=GamersNexus https://www.youtube.com/watch?v=1W_mSOS1Qts&t=2s&ab_channel=GamersNexus https://www.youtube.com/gamersnexus https://gamersnexus.net/ https://bsky.app/profile/gamersnexus.bsky.social https://x.com/GamersNexus YOU CAN NOW BUY BETTER OFFLINE MERCH! Go to https://cottonbureau.com/people/better-offline and use code FREE99 for free shipping on orders of $99 or more. You can also order a limited-edition Better Offline hat until 5/22/25! https://cottonbureau.com/p/CAGDW8/hat/better-offline-hat#/28510205/hat-unisex-dad-hat-black-100percent-cotton-adjustable --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/ Discord: chat.wheresyoured.at https://discord.com/invite/QUUQUP9szv Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron https://bsky.app/profile/edzitron.com https://www.threads.net/@edzitron See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

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  Coming up, will Steve Burke of Gamers Nexus be able to help Ed Zitron understand tariffs? Should we treat Sam Altman's new startup like a venereal disease? And who is the mysterious identical man living in Kevin Roos's mirror? All this and more, on this week's Better Offline.

• 2:34Ed Zitron?

  Good grief.

• 2:47Ed Zitron?

  That's right, you're listening to Better Offline. I'm your host, Ed Zitron. As a reminder, you're now able to buy Better Offline merch. Check the episode notes for a link, of course. More importantly, today I'm joined by Steve Burke, the host of the incredible Gamers Nexus, someone I've wanted on the show since I started it. Steve recently put out a three-hour-long video called "The Death of Affordable Computing", and it's the single best way I've seen anybody explain the current tariff situation. Steve, thank you for joining me.

• 3:11Speaker 08

  Thanks for having me, yeah. I'm excited to talk more about it.

• 3:15Ed Zitron?

  So, is there any way you can break down in simple language how these tariffs actually work?

• 3:22Speaker 08

  I mean, effectively, the tariffs are... They're effectively a tax, right, that's paid on imports. So the goods come in from any other country that's potentially tariffed, and the company bringing those goods in has to pay some amount in order to complete bringing them in. And so, that then gets passed on to somebody. Maybe they absorb some of the cost, maybe they increase the price of the product. But tariffs in general, of course, not a new concept, and it's just this particular round of them has affected the computer hardware industry in a larger way.

• 3:57Ed Zitron?

  So, they're paid by the people receiving the goods? So the computer, so like Height or Cyber Power, whomever, receiving a case, for example, would pay the tariff before they even shipped it to someone?

• 4:09Speaker 08

  Correct, yeah. I mean, it's the same all the way down to the smallest companies. We spoke to Lewis Rossman as part of that piece. He's known best for probably Right to Repair. And he's a good example where, as a small repair shop in Austin, Texas, he's got maybe six or so employees. He personally doesn't, as he said in the video, bring in the goods, but he buys them from someone who does. So, you know, then that person would be the one importing them and paying the tariff.

• 4:37Ed Zitron?

  So what made you want to make this video because you've done a good amount of PC industry stuff, but tariffs feels like a jump from you, not an illogical one, though.

• 4:45Speaker 08

  Yeah, tariffs was, it's a big topic and it was very challenging to try and approach because for us, the, the number one reason to get into it was just we're starting to see the impact on computer hardware and a lot of companies had things to say about it. So that was the obvious reason to maybe look into it. The hesitations from us initially were this is a topic that is, it's very difficult to completely isolate from politics, which we try to stay away from.

• 5:18Speaker 08

  But it's also important and it does affect what we talk about every day, which is value and pricing. But the other challenge is that this is not something where I can claim to be an expert, like global trade, you might imagine.

• 5:33Ed Zitron?

  Yeah, a little bit big.

• 5:34Speaker 08

  Yeah, it's a very large topic. But that made it interesting to us because it was one of those like, okay, so we're we're closer to where you might expect most viewers to be in terms of knowledge, or you're just getting the information daily. With the one exception that we might have better access to companies that do have a lot of experience with this stuff. And maybe no one person can break down global trade for us.

• 6:02Speaker 08

  And we've all seen economists on TV and whatever. But what we could get is people talking about just how does it affect them and their company? And then hopefully with that, put together a fuller picture that's you know, a little more, maybe like a pragmatic approach to it. So that, that was a, yeah, that was the way to break it down for us.

• 6:21Ed Zitron?

  So for the listeners who haven't watched the video, and I say this as someone who can barely make it through a half an hour video, watch the whole bloody thing. What is, how, what are the current effects? What are the, the things happening today to say PC manufacturers that people might not know about?

• 6:36Speaker 08

  It's interesting. So might not know about makes that interesting. The ones that people do know about, I'll keep brief here, but just days ago, Microsoft moved to increase pricing of its Xboxes. Logitech has increased prices of its peripheral components, keyboards and mice and so forth. And this is something we're going to see at Corsair. I was just speaking to them. They're about to increase the price of some of their computer cases that we're in the process of reviewing. And that's kind of the obvious one. That's the one people expect. There's also, and having listened to some of your previous episodes, I think this, this might be a topic you'd want to get into, but there's also some room for greed, corporate greed,

• 7:21Speaker 08

  where this is a great cover story for them to change some prices. But then as far as answer the question of like, what effects might people not know about? I think there's, there's some really interesting ones, sort of down chain in the, in the supply chain where things like logistics and freight and shipping companies are starting to have to deal with potentially reduced hours. And so you think about the supply chain, like to get a product from a country to another country, you know, just to make it in, say, China, a motherboard might require something like 100 factories if you tally all of them, meaning including,

• 8:04Speaker 08

  yeah, including the metals factories. And so you've got all those impacts and then you have the freight and the couriers, the port, the dock workers, the couriers on the other side, the warehouse workers, right? It's just a huge chain. It's really, it can't be elastic. It's got to be pretty rigid. One of the interesting ones we're seeing though. Is some of the factories from some of the companies I was just speaking with are beginning to adjust their terms. So factories will allow terms of payment to be potentially partially upfront and partially on completion of order. Some of them are starting to adjust to front

• 8:44Speaker 08

  load more of the upfront costs or all of it. And that's because they have kind of gotten scared of potential order abandonment. When companies can't afford the tariff, they abandon the container,

• 8:57Ed Zitron?

  right.

• 8:57Speaker 08

  The factory. Yeah. And so, so that'll have this unseen impact later where it's going to affect the cost of money. Companies have to borrow money a lot of times to bring this stuff in. They have to pay more upfront.

• 9:08Ed Zitron?

  Oh, so they'll be borrowing more money upfront because otherwise.

• 9:12Speaker 08

  Exactly.

• 9:13Ed Zitron?

  Otherwise, they won't be able to afford, afford the orders that are now more expensive on the front end.

• 9:17Speaker 08

  Yeah. And then they pay interest for a longer period of time. That gets factored in. And so this, it's just really like, the more you talk to people, the more there's all these hidden consequences that pop up. And the one thing everyone kind of drove home was, it's not to them, the tariffs themselves that are necessarily the problem. It's sort of the, the way they were being rolled out where it was, at least for a couple of weeks, they're nearly daily changes and unpredictable.

• 9:44Ed Zitron?

  I did like during the video watching as you went from, from person to person saying, okay, right now, this tariff is this. By the end of this conversation, it may not be.

• 9:56Speaker 08

  Yeah.

• 9:57Ed Zitron?

  Insane way to run global trade. You had a few examples as well, where it kind of looked like certain things would just double in cost for the company, that they would just be paying effectively nearly double, or like, if it's 120 bucks to, to buy something, they're paying a hundred bucks on top. How is any of this sustainable?

• 10:15Speaker 08

  I think, I mean,

• 10:19Speaker 08

  Yeah, for the computer industry, I'm not sure that it is sustainable. There's already, there's already been price creep that is not anything to do with tariffs. It's just over the last several years, the companies, yeah, I mean, they've, they have big markets to sell into. And so if you're a small time consumer or gamer, you use Adobe Premiere with the CUDA GPU, you're just not at the top of the priorities. And the only way to get closer to the top is to pay a whole hell of a lot more for the components. So like, there's already been price creep.

• 10:54Ed Zitron?

  When you say pay a lot more for the components, who's paying more there?

• 10:58Speaker 08

  It's, it's the consumer. I mean, yeah.

• 11:01Ed Zitron?

  So it's really the high end stuff is the best you have. Why do you have to buy the more expensive stuff? Is it just that it will be the cheaper ones are having to use lower quality components? Or is it something else?

• 11:13Speaker 08

  Well, it's, it's interesting because it's almost like the, this question, I think, is it, the real answer is that cheap stuff doesn't exist anymore. Like, the, the cheap products are gone. And this is pre tariffs. This is like, it's only getting worse. But you look at GPUs and Nvidia with its dominance has, has managed to slowly shift the low end into the mid range in terms of pricing and the mid range into the high end in terms of pricing, but not in terms of necessarily performance scaling. And so you're already paying disproportionately more for what you're getting versus several years ago. And this

• 11:57Speaker 08

  is beyond inflation. This is beyond tariffs. You stack something like massive tariffs on top of it. And people who are already kind of struggling to justify a purchase of an expensive GPU. I was looking at RTX 5090s, which are supposed to be about a $2,000 video card, about a week or two ago. I haven't checked today. But, and the cards were typically in the 2,900 to 300, $3,000 range.

• 12:25Ed Zitron?

  Jesus.

• 12:26Speaker 08

  Yeah. And that includes on shelves at micro centers. And, and some of that's going to be tariff impact and some of it is just kind of price creep.

• 12:45Speaker 09

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• 14:00Speaker 11

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• 14:11Speaker 10

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• 14:46Ed Zitron?

  It does kind of feel like, well, to the title of the, to the title of the video, it's like the end of affordable computing has already kind of happened because it doesn't seem, and for our less technical listeners, when we say 50, 70, 50, 80, 50, 90, referring to Nvidia graphics cards on the consumer side, so the things you put on a computer, so you can see what's on your monitor and also play games. Steve, I'm sure you love that technical explanation.

• 15:09Speaker 08

  Yeah, it's great.

• 15:10Ed Zitron?

  But it's, I nearly said 3D FX there for a second, aging myself, but it feels like those lower end ones aren't even anywhere near as good as, you did a video on this as well, that the 50, 70, 50, 80, the lower end or mid-range ones just are nowhere near as good as mid-range and lower end used to be.

• 15:29Speaker 08

  Yeah, it's the, I think the, the most understandable version of this in terms of when we were trying to figure out how do we communicate what's happening to people, was we came to the word shrinkflation, which people are familiar with, except instead of a bag of chips where you get...

• 15:48Ed Zitron?

  Well, maybe you should explain what it means.

• 15:50Speaker 08

  Sure.

• 15:51Ed Zitron?

  Yeah.

• 15:51Speaker 08

  Yeah, so the concept being that, and again, to preface this, you know, we're experts on hardware, not economy, but like this, this is stuff that it all kind of bleeds together in a way we get familiar with it, but shrinkflation being the, the concept of you go to a store to buy your bag of chips or your bundle of toilet paper or whatever, and you get fewer items for minimally the same cost as it used to be, right? So it's sort of disguises the change in value, the cost per unit or whatever that you're getting. Then you apply this to electronics and the version of it is you buy the video card

• 16:34Speaker 08

  or the CPU and maybe you have fewer, lower performance relatively speaking than you would have had in previous generations while still spending at least the same but likely more. And one of the things that... Uh, you know, this kind of deviates from the tariffs discussion, but one of the things I'm concerned about is as cost for consumer electronics goes up, especially things like computers.

• 17:01Speaker 08

  And especially as caused by things like the current tariffs, there's an opening for companies like Nvidia to push for more of a lack of ownership model. So like they have services where you can play games over the internet streaming, kind of like Netflix.

• 17:19Ed Zitron?

  Was it GeForce Now?

• 17:20Speaker 08

  That's right. Yeah. And, and this creates a great opening for these companies to step in and say, you know, we're so sorry. You can't afford our cheapest model. $550 video card to play games or to render videos, you know, or do 3D modeling. But good news, we have something for you and it's $50 a month and you can use it for, you know, this many hours and in between maybe we'll do ads or maybe we turn on and off the different services you have access to. And so that's one of my concerns is it's, it's another step in furthering the you own nothing ness of, of the current consumer economy.

• 18:01Ed Zitron?

  It kind of feels as well. And you hinted at it earlier as well, where it's like, these companies are, Microsoft's raising the price of the Xbox. I don't imagine that's coming down. I don't get, I don't get the sense that Microsoft is going to say, don't worry everyone that everyone on Wall Street, by the way, they, the markets love it when we charge less. So we're going to bring this down as an ethical company. It just feels like a, that there are the immediate near-term effects where its prices are going to increase, but just no one is going to, like no, no one's going to bring these prices back down at the end of the tariffs. No one really understands what's going on. So they, it almost feels like they'll be able to

• 18:44Ed Zitron?

  kind of push it under the rug and obfuscate what they've actually done as well.

• 18:49Speaker 08

  Yeah, I think

• 18:52Speaker 08

  there's, there's a couple of things going on where there's. It's interesting. Normally, we, as in GN, we're in a very cynical mindset for a lot of our coverage, and that's just the nature of it. It's not necessarily adversarial, but it's untrusting, I would say, of what companies are saying. And so part of that in this situation is, okay, there are avenues here for companies to get the price increases they've wanted, but they've needed an opportunity to do it. But at the same time, unlike most of the other stories we cover, this one is so wide-reaching and industry-impacting with the sort of sporadic

• 19:37Speaker 08

  nature of the tariffs application and also the high percentage of them, that there are real consequences and it is hurting companies. So you've got this mix, right, where it's like, we can't be too cynical this time because there are real-world impacts, like with Hight, where they were just going to lose money for computer cases that they sell if they continued to sell them into the US market. And so they've abandoned it. They decided, we don't need to sell to the US, we'll send them somewhere else.

• 20:05Ed Zitron?

  Which is crazy. That's a large part of their business.

• 20:09Speaker 08

  Yeah, it was, I want to say the number, the product director, Rob Taylor, shared during the interview, I think he said 65% revenue was from the US. Yeah. And, but at the same time, you know, so that's a real, that's where it's, it's not helpful to be cynical because this is a real impact to this company. We've seen their numbers. But then, on the flip side of that, back to the cynicism, you look at a company like Microsoft, where they've increased not only the cost of their physical hardware, which is impacted by tariffs because a lot of it does come from China, but also they've increased the price of their digital downloads, like video games, where they're saying they're going to start moving

• 20:50Speaker 08

  towards an $80 per game model from typically 60. And digital video game downloads are not currently, as far as I understand it, are not tariffed.

• 21:02Ed Zitron?

  No. In fact, that's the whole point of digital downloads, that why are they $80? You're saving money selling this.

• 21:11Speaker 08

  And and I think what's happening here is they have one real reason to increase the price, which is their cost has gone up on the hardware. And that is giving them sort of cover fire to also increase the price of things that haven't gone up. Maybe you can make an argument for inflation affecting development costs or something like this, but packaging it all together and doing it at the same time. I I think it's also it it's sort of exhausts the consumers attention where it eases the acceptance of this higher price because at some point you get hit with this news so frequently, you're like, I just, I don't care anymore. I get it.

• 21:55Speaker 08

  It's all expensive and you lose the capacity to be mad at a specific company.

• 21:59Ed Zitron?

  But it's just, I truly, I'm learning about this in real time. So Microsoft is raising the price of first party games to 79.99. That's completely insane. And I think that there is a delineation of cynicism here where you can be cynical about a company, but all of the companies you talked to in this video were very much, I mean, you had competitors hanging out with each other to tell you stuff. It feels like there is a marked difference between a company saying, yeah, we every two minutes a wheel spins and we pay more on stuff and having a real reason to do that. And a company just saying, yeah, games are 80 bucks now. I don't know what to tell you, mate.

• 22:39Speaker 08

  Yeah, I think the the companies we spoke to, and they range, like I said, from someone with six employees, who's a sort of true small business owner, like the you think of an American small business owner, and that's exactly the representation you think of, all the way up to multi billion dollar publicly traded Corsair components, which makes memory keyboards, computers, they even have some assembly in the US.

• 23:09Speaker 08

  And all of them feel the impact in comparable ways, but where they differ is their ability to cope with it. And so I think it's these smaller companies that are going to get hit particularly hard. And this actually came up a couple of times in the interviews as well. One of them that we didn't, we didn't include was a comment that someone from Corsair made, I think we weren't filming yet, but it was, we were talking about GN and my goal with this wasn't to insert ourselves into this story. So we, we kind of kept anything about Gamers Nexus out of it, but the tariffs impact us too. And one of the comments he

• 23:51Speaker 08

  made, I asked him, who do you think this affects the most? And he said, well, it's guys like you, right? Like it's small businesses and medium sized businesses, because the big ones are large enough to have levers to pull.

• 24:06Ed Zitron?

  Right. And I guess I'm going to ask you one of the most annoying questions that I possibly could, which is, and you do cover this in the video, why can't they just make in America? And I know that the answer is it's going to be very obvious, but still people are going to want to hear.

• 24:22Speaker 08

  Sure. Yeah, it's really, it is actually a great question. It's obviously very common.

• 24:29Speaker 08

  It's complicated. So the easiest answer to that, I think if you try to boil it down to kind of like two components, there's cost, which everyone's familiar with, and we can kind of get into that. So there's things like labor costs, real estate costs, all this. And, and there's maybe some greater social discussions to have there with regard to labor cost. But then there's also supply chain. And so if we ignore the cost component for a moment, and just assume it costs exactly the same amount of money to make it in China or Vietnam or Thailand as it does in the US.

• 25:08Ed Zitron?

  Which it doesn't.

• 25:09Speaker 08

  Which it doesn't. It's the global manufacturing average cost in terms of wage per hour is according to Corsair's CEO in our interview is $2 to $4 per hour. It's obviously not even close. Yeah. And so if we just assume it's equal though, for sake of conversation, the new challenge is In China in particular, but just that part of Asia in general, there's already a huge factory presence. They have the tooling, they have the people, they have supply chain. And so what that really means is you can go to Huaqiangbei in Shenzhen right now,

• 25:50Speaker 08

  and you can go talk to someone to get, tell them you have this brilliant idea for a new electronic device. You can have someone design the PCB. You can have someone print the PCB. The printing can be delivered same day for a prototype. And you can also start sourcing factories for the capacitors, the inductors, the semiconductors, the MOSFETs, the shell or case, if there's going to be one. All of that can happen in the same spot. And it can all be sourced from sort of the same, say, 50 mile radius for the most part. And that doesn't exist in the US. And if you want to make a motherboard, as an example, it came up in the video in the US.

• 26:33Speaker 08

  We didn't get too deep into it in the video, but there's probably 10 to 30 major component, complete component suppliers for that board. So if you want to make that motherboard in the US, which your CPU and your GPU go into, it's sort of the brainstem of the computer. You bring that over here. And what you might have first is the assembly line. It's an automated line. It's primarily done by machine these days. So you bring over the SMT line, the surface mount technology line. That line has machines that first of all are made all over the world. Right. Yeah, so that's already a different thing. But and then those machines have reels of components like capacitors. The capacitors come from a factory in China. So you'd have to bring that factory over.

• 27:16Speaker 08

  That factory to make the capacitors has factories. So it uses factories for maybe ceramics or for aluminum or steel or copper, whatever they may use, copper coil for inductors. You have someone doing the winding for the coil for things that go on power supplies. And all of that is down chain factories. So this one motherboard quote unquote factory, what they're doing is effectively equivalent to someone assembling a pre-built computer in a pre-built computer assembly plant in the US like Lenovo. They're doing the same thing. They're putting all the parts together, but they're buying them from elsewhere. And that's fine. That's how it works. But to just bring that over, it's not something you can flip a switch on.

• 28:07Speaker 09

  Empower is all about helping you invest well so you can go out and live a little. And their Free Empower Personal Dashboard shows you your full financial life in one place. You'll be able to see your net worth, monitor budgets, analyze your portfolio, set retirement goals, and more. Whether you're saving for something big, want to treat yourself, friends, or family, or meet long-term goals, Empower helps you see where you stand. You've worked hard for your money, and Empower can help you make the most of it. Download the Empower Personal Dashboard or visit empower.com. Not an Empower client paid or sponsored.

• 28:39Speaker 13

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• 29:09Speaker 10

  Hi, I'm Jenna Oshkowitz. You might know me from Glee. This is At the Table, the food allergy podcast, a show about food, connection, and what it really looks like to live with food allergies. Each episode, we hear stories from real people like Daniel.

• 29:24Speaker 11

  People would always think I was lactose intolerant, so I just kind of shortened my explanation to I'm deathly allergic, in a big way that defined a lot of my childhood.

• 29:35Speaker 10

  And while there are challenges, there are moments that remind you you're not alone.

• 29:40Speaker 12

  One of the best guys that I dated, he made a point to memorize all my food allergies.

• 29:46Speaker 10

  So join us and hear their stories and more, because living with food allergies isn't just about what you can't eat. It's about still having your seat at the table. Brought to you by Genentech and Novartis. Listen to At the Table, the food allergy podcast, on America's number one podcast network, iHeart. Follow At the Table and start listening on the free iHeart Radio app today.

• 30:09Ed Zitron?

  And it seems like a big part of it as well is that China already has this infrastructure to manufacture these things to your point that they have someone who can do the prototype, that they have someone. I don't know, like, I assume there are like screw factories and things that don't exist in America, or if they do, they are geographically inefficient in comparison.

• 30:28Speaker 08

  Yeah, I think that's a big part of it is there are factories in the US that can do various things. I mean, certainly you get down to physical hardware like screws. I'm absolutely certain there's factories that make screws in the US. There's factories that make cardboard boxes in the US. But like you said, these things are not on the same block. And while that can be reconciled, making a company eat an extra cost is basically impossible. And so if the approach is to do some form of taxes, it would have to be so extreme that there really is no other choice but to start building factories in the US. But the problem then is that this takes years. So

• 31:13Ed Zitron?

  And it's just in here, yeah.

• 31:15Speaker 08

  Right. Yeah, it would just, it just takes forever to start building. I mean, then you've, it's also just, it's an enormous amount of money. You can't just have it, you know, you need to plan for it. So, so that's a big challenge.

• 31:28Ed Zitron?

  It kind of feels like that on the cynical side, I mean, it kind of feels like it is the case where it's so much of our economy is based on just cheap labor that we've outsourced our entire manufacturing to other countries that, and it all relies upon a certain kind of discount labor that just doesn't exist and probably can't exist in America.

• 31:52Speaker 08

  I think it not only can't exist in America, but the amount of available people is probably not high enough to create that many manufacturing jobs, especially instantaneously. One thing that's interesting, though, I don't think I've really spoken in

• 32:15Speaker 08

  Anywhere about this side, but something that's interesting with contract manufacturing, especially in China, is at least for the factories we've toured and visited over the years, a lot of the contract factories, they shut down for Chinese New Year for a while. It's their biggest holiday. So similar to Christmas in the US, you have several weeks off for a lot of people and they're at last pretty long. So the one factory we work with and we've toured, they shut down for nearly a month for Chinese New Year. And when I once asked them, when I, it was my first time over there, you know, I asked the factory owner, it was basically, hey, no, absolutely no disrespect. Don't take this the wrong way. I'm just curious, why such a long time? Like as an American, right? You come from

• 32:58Speaker 08

  a work culture in terms of just, you're always at work. Four, four weeks is a big stretch of time. Doesn't that affect your production? And he said something really interesting to me where that factory in particular, a lot of their laborers come from all over in China. China's very large and they come from all these different provinces. And so they sort of migrate out to do the work locally at the factory and then they might go back and maybe they're going back to work at home or they just bring the money home and spend time with the family. And the interesting thing there is that kind of opened my eyes to how can you, how can a place like Shenzhen exist where almost everything you need to

• 33:42Speaker 08

  make a product is in like one city? That seems insane, right? Like the amount of people you would need for that is crazy. And I guess that's part of it. And I don't, you know, obviously don't claim to be an expert in it, but just from personal experiences, talking to people and visiting these places, these are kind of the pieces that have really clicked for me to help me better understand how, how manufacturing works.

• 34:04Ed Zitron?

  Yeah, it's just, every time I think about what these tariffs are meant to do, I feel insane. Cause it's like, okay, we're going to charge more for things to the people shipping them in, which will cause them to build things in America, which they can't do. But they should like that feels like most of the logic here, but that we'll just factories will sprout out of the ground like weeds like it's just bizarre.

• 34:33Speaker 08

  Yeah. And even the companies that do make stuff here. This is what's interesting too, is that um.

• 34:39Ed Zitron?

  Yeah. Cause you spoke to one, a natural manufacturing company in America.

• 34:43Speaker 08

  That's right. Yeah. So we spoke to three, three companies that we spoke to have sort of different levels of manufacturing here. So there's one of them, the one you're probably referring to is called Proto Case. And they stamp cases. So they, they assemble servers and network attached storage devices. And, uh, and then they can stamp their own cases for those. They take the metals. They put them in a big press with their own tooling and they press it and then they can kind of bend the metal into, into a server case. So they do some manufacturing here and they do a lot of it in Canada.

• 35:24Speaker 08

  The other two companies we spoke to are different type of manufacturing where it's assembly and actually Corsair to their credit has assembly as well. So I guess three. And the assembly groups, they so Cyber Power PC makes pre-built computers mostly for gaming. And they employ hundreds of people in the city of industry, California area to assemble computers. And so those people take about eight to 10 components that Cyber Power does not make. They buy them from other companies and they assemble them right into a computer and it's, it's really that straightforward.

• 35:59Speaker 08

  But this is effectively a factory job. It's an assembly job. And the, the PC that's made ultimately it's branded a Cyber Power PC, but just like any PC on the market. Dell, HP, Asus, it doesn't matter. They don't make the CPU. They don't make the GPU. That's by Intel, Nvidia, AMD. They often don't make the cooler, the storage device, the memory. So all this stuff, yeah, it's got to come from other people. And for the most part, the places it ends up coming from are going to be China, Vietnam, Thailand, Singapore, Malaysia.

• 36:36Speaker 08

  Taiwan, I don't think I named yet. And um, some stuff from Japan, but. That's kind of the, that's where the stuff comes from and then they assemble it in the US. But those companies that assemble the computers in the US, they still get hit by tariffs because they're bringing stuff in to complete the product. But what's interesting is it's, it's almost like these components like CPUs and GPUs. You can think of them as raw materials where the products, the computer can't exist without those raw materials, but they're not blanket exempted as raw materials.

• 37:12Ed Zitron?

  Yeah. And it feels like you can't actually exempt any particular industry because of the manifold different parts. I think Lewis Russman made the point as well where it's customers are going to get pissed off about the price increases. And it's kind of like, well, you're the one buying these things that are made with Chinese parts. It's not like you can avoid that.

• 37:32Speaker 08

  Right. Yeah, no, I mean, that was, that was an excellent point by him where he's, he's a repair shop. And as he was saying, for the device to even get to him, someone else has to exist before him. And that's going to be the customer buying from the original manufacturer. If the original manufacturer chooses to make their product, let's say entirely in Detroit, and they use parts entirely from Detroit, then Lewis, the repair shop will probably buy replacement parts from Detroit.

• 38:05Ed Zitron?

  Right.

• 38:05Speaker 08

  That's, that's where they come from. And so it's, yeah, I think like him, just as much as the assembly plants that put a product together that consumers familiar with, they're affected by the same thing, which is there's forces so much larger than you. You can't, you don't have the option to move it because it's not yours. And so what do you do? Right?

• 38:29Ed Zitron?

  Yeah. One thing, as we come to the end here, one thing that did strike me is how did you get all of these competing companies to actually hang out and talk to you quite candidly at the same time?

• 38:42Speaker 08

  Yeah, it's, I've known a lot of the people in that video I've known for pretty close to some of them like 12 to 14 years. Fortunately, like we've run across each other at conventions a lot. And so for like the backstory, I guess Cyber Power and IWA Power are two competing pre-built companies. And I painted them both and I was like, hey, It would, it would be, it would really send a message. If you guys agree with each other on this particular issue, I think it would help people understand that it is impacting both of you in similar ways. Because these are companies that they're fighting for the same market share, for the same customers.

• 39:26Speaker 08

  And, uh, you know, if you can get them together in a room, and they were even sharing numbers with each other, how many employees they have, how many units per year they make, like this is crazy information to share. Uh, but I, I think it was, it was sort of a solidarity moment where the read on the situation I had was the companies were all looking at this as this is our opportunity to try and explain why the prices are gonna go up and whether or not it's for legitimate reasons or for the more cynical reasons we've discussed, to them it was an opportunity to talk about that and um, I think our timing was a big part of that where we booked our tickets. Uh, as soon as the

• 40:10Speaker 08

  pause went into effect on some of the international tariffs, or actually I'm, I was, it was just before, it was like a day before that. So we booked the tickets a day before the pause. Right around when they went into effect, we landed and then some of these changes like pauses and exemptions and, and non exemptions were happening already. But because of the chaos in that four day window, I, I think everyone was willing to talk to us on record because nobody knew what was going on.

• 40:39Ed Zitron?

  And just to close us off, you mentioned it's, it costs a ton of money and a ton of time. How long and how much money roughly? Because this was, I, I do not watch videos of these length. Casey, Casey, friend of the show, Casey Kagawa knows this well, but I watched the whole thing, like how much, like roughly? Because I want people to know how hard you work.

• 41:00Speaker 08

  Uh, to make the video, so it was probably.

• 41:05Speaker 08

  If you count my time at $0, then we should have been over 10 grand in total costs. So that's travel plus editing time. There's a lot of editing time because we had over eight hours of footage. And the way it kind of came together, and it was interesting, where, you know, we got the news down the wire about the new, the word, the government has officially named them is reciprocal tariff. So when those came out, that was when we started booking the flights. And like I said, it was right before the pause on some of them. And

• 41:44Speaker 08

  so we booked the flights with no return flight. It was a 12 hour, 12 hours away till we got on that first plane. We had the first hotel booked. And then Vitaly and I, my camera operator, we flew out there and we played it day by day. And I used a hotel I knew. So I was basically like, hey, we need to extend one more day, you know. And then we just kept booking them based on who I could get in touch with. And I was just on the phone constantly calling every company I knew. And they're kind of all in the, you know, they're either in San Francisco, or they're in LA for most of them.

• 42:21Ed Zitron?

  Steven, it's been such a pleasure having you on the show. Where can people find you?

• 42:25Speaker 08

  You can check out GamersNexus.net if they want the written adaptation of videos, or the YouTube channel Gamers Nexus is where everything goes.

• 42:34Ed Zitron?

  And you can find me on the internet. You are listening to Better Offline, of course, following this will be an extremely old liner that I swear I'll update one day. Thank you for listening. And Steven, thank you for joining us.

• 42:44Speaker 08

  Thank you.

• 42:53Ed Zitron?

  Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matt Osowski. You can check out more of his music and audio projects at MattOsowski.com, M A T T O S O W S K I dot com. You can email me at [email protected] or visit betteroffline.com to find more podcast links and of course, my newsletter. I also really recommend you go to chat dot where's your ed dot app to visit the Discord and go to r slash better offline to check out our Reddit. Thank you so much for listening.

• 43:26Speaker 14

  Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, coolzonemedi.com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

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