Are your favourite guitar strings about to get more expensive? D’Addario expects to incur more than $2 million in tariffs this year as a result of US trade policy
Donald Trump’s sweeping global tariffs have wreaked havoc on markets around the world, and the musical instrument industry has been heavily affected.
We’ve seen US amp and pedal companies stretched to breaking point already, with some industry commentators predicting “mass layoffs” as a result of price hikes and consequential low sales of goods.
READ MORE: “The electric guitar is an American cultural export” NAMM CEO John Mlynczak on why Fender, Gibson, PRS and others joined forces to lobby congress over wood tariffs
Now, in a new conversation with Reuters, John D’Addario III – CEO of family-run instrument accessories company D’Addario – explains the impact tariffs, both potential and already enforced, have had on the business, and what he predicts for the landscape for the rest of the year.
“We estimate that we have incurred anywhere between $500,000 to $750,000 in additional costs that we didn’t plan for, already this year,” says CEO John D’Addario III.
According to the video’s description, D’Addario expects to accumulate more than $2 million in tariff costs this year alone.
“We’re not alone,” he continues. “I’m sure other businesses are dealing with that. But it did force us to react quickly in terms of price changes.”
D’Addario is one of the world’s leading makers of musical accessories, with a strong presence in markets around the world.
“What did we do in the onset of the tariff war? Lots of things,” he goes on. “First, we filed an application for a foreign trade zone that we could designate for portions of our facilities, which would allow us to import either finished goods or parts of finished goods. And avoid tariffs, presumably, if you re-exported that product to our export customers.
“And that’s very important because our business is roughly 50/50 US and international in terms of volume.”
D’Addario explains that in response to Trump’s tariffs, the company has developed the agility to reroute shipments of its goods on the fly.
“We can literally, if we need to, divert shipments that are on their way to the states to other markets where we have our own entities,” he says. “So literally stuff that’s on the water intended to go to the US, we can divert if we need to to different parts of the world, to avoid the tariffs.”
The big question though: are the price of D’Addario strings and other accessories set to rise?
“We implemented a price change in early May, and if necessary we may need to consider additional price increases if tariffs continue to escalate,” D’Addario says.
“At the end of the day, I think what we have to concentrate on is things that we can control. Things like onshoring, things like creating a foreign trade zone. Those are the things that we can control and we’ll continue to do those things so we can preserve our company’s presence and strength in the market.”
View D’Addario’s full product lineup via its official website.
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Source: www.guitar-bass.net
