"John Mlynczak, NAMM CEO, expresses concerns over Trump's tariffs in the guitar industry, stating that their unexpected nature leaves businesses little time to strategize, accommodate, or innovate"
In the midst of confusion surrounding the freshly implemented tariffs and their potential ramifications for the musical instrument market, John Mlynczak, President and CEO of the National Association of Music Merchants (NAMM), vocalizes his apprehension and pushes for the protection of the industry.
"The general consensus is these tariffs can be incredibly destructive for our sector, and it's devastating in numerous ways," shares Mlynczak during a forthcoming interview with our website.
"It's not just about the sudden expenses that businesses will have to handle individually, but it's also about the disruption of supply chains. It's the unpredictability, uncertainty, and the rapid implementation of tariffs. Companies don't have the time to strategize, adapt, or make necessary changes."
Mlynczak is leading a small delegation to the Ways and Means Committee members — the government body that formulates fiscal legislation, including taxes, tariffs, and social service programs — to lobby against tariffs.
A few weeks ago, Mlynczak released a statement addressing the tariffs impact on the U.S. music products industry and urged the administration to "exempt musical instruments and accessories, alongside materials used to manufacture musical products."
Both boutique and established brands have voiced concerns, with many companies already experiencing the effects. Credit rating agency Moody's downgraded Fender's rating, taking the new tariffs into consideration.
Electro-Harmonix founder Mike Matthews stated that foregoing foreign purchases isn't feasible for most American gear companies, while Morgan Amps confirmed the tariffs would have a noticeable ripple effect on their amp prices.
"The most important action people can take now is [to] contact your member of Congress," Mlynczak emphasizes. "We're hearing from our lobbying firm that this is how automakers and Apple have secured exclusions. There's currently no process for exclusions, but we hear that it's because of pressure on Congress.
"When you pressure your member of Congress, despite there being no bill or process for Congress, that member of Congress can utilize that pressure and apply it internally in D.C."
This week, a gathering of guitar industry leaders convened on Capitol Hill in Washington, D.C., for the first time in 17 years to advocate for the significance of tonewoods and their indispensable role in the American musical instrument sector.
The delegation, which, according to Guitar.com reports, includes NAMM CEO John Mlynczak, Gibson's Erin Salmon, Martin's John McElroy, Fender Executive Vice President of Product Justin Norvell, PRS Director of Supply Chain Meghan Efland, and Taylor Guitars Director of Sustainability Scott Paul, has already met with Tennessee Senator Bill Hagerty, with further advocacy efforts planned.
our website's full interview with NAMM CEO John Mlynczak will be uploaded later this month.
Background: Tariffs and Their Consequences in the Music Industry
The ongoing tariffs on musical instruments in the U.S. have generated considerable challenges, mainly due to actions by the Trump administration. Initially, a 145% tariff was imposed on Chinese imports, which was later reduced to 30%. Although this was a reduction, the tariffs continue to wield a substantial influence on the music products industry.
Financial and Operational Challenges:
- Cost Increases: The tariffs result in higher costs for imported instruments, potentially leading to price hikes for consumers. These costs could account for 50 to 75% of the additional costs being passed on to customers, affecting both beginner and professional instruments.
- Cash Flow Concerns: Smaller music retailers face significant cash flow problems due to the immediate requirement to pay tariffs on products, even if the items aren’t promptly sold.
Industry Professionals' Perspectives:
- Cullen Hendrix of the Peterson Institute for International Economics highlights the importance of entry-level instruments, crucial for student musicians and school programs, being the most impacted.
- Paul Smith of John Hornby Skewes & Co. Ltd. cautions that rising prices could deter families from purchasing musical instruments, potentially hindering the musical journeys of many.
Individual Companies' Situations:
- Fender, Electro-Harmonix, Morgan Amps, and Taylor Guitars: While specific consequences for these companies are not extensively documented, all U.S. manufacturers overly reliant on imports, such as parts or finished goods from countries like China, face increased expenses. These expenses are often transferred to consumers, potentially impacting sales and profitability.
Legal Developments:
- In recent developments, some of Trump's tariffs have been declared unlawful by U.S. courts. However, this does not necessarily mean that previously paid tariffs will be refunded, adding to the legal complexity surrounding tariffs in the industry.
Future Consequences:
- The tariffs are part of broader trade policies designed to bolster U.S. manufacturing, but critics argue these policies cause more harm to U.S. businesses rather than aid them. Industry leaders query whether these policies will eventually benefit domestic manufacturers or consumers.
In conclusion, the tariffs continue to pose considerable challenges to the U.S. music products industry, impacting both consumers and manufacturers. The ongoing legal and policy developments may shape the industry’s future course.
- John Mlynczak voiced his concerns about the tariffs, stating they are detrimental to the music industry, mentioning brands like Fender, Electro-Harmonix, Morgan Amps, and Taylor Guitars.
- The tariffs have increased costs for imported instruments, which could account for 50 to 75% of the additional costs being passed on to customers.
- The tariffs have caused cash flow problems for smaller music retailers, necessitating immediate payment for tariffs on products even before they are sold.
- Cullen Hendrix of the Peterson Institute for International Economics pointed out that entry-level instruments, essential for student musicians and school programs, are most impacted.
- Mlynczak led a delegation to the Ways and Means Committee members, urging them to exempt musical instruments and accessories from tariffs.
- Individual companies may face increased expenses due to the tariffs, often transferring these expenses to consumers, potentially impacting sales and profitability.
