“Can I still make a profit?”: Electro-Harmonix founder shares concerns following Trump’s import tariffs
Mike Matthews, founder of Electro-Harmonix, has shared concerns over the future of the pedal brand amid Donald Trump’s new tariffs on imported goods.
The US president has introduced 25 percent tariffs on imports from Mexico and Canada, and has also imposed new tariffs on goods entering the States from China. Currently, EHX has an inventory that will help them “ride out this storm”, though Matthews is not too sure what the brand’s future will look like if such rising costs continue. EHX assemble their pedals in the US, though components such as circuit boards are manufactured overseas.
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In a paywalled article from Bloomberg [shared via Guitar World], it is reported that EHX has been finding ways to avoid an over-reliance on China, in particular by sourcing some of its components from places. It is also currently delaying immediate shipments from China, though this is not going to be a solution that is viable longterm.
It is also important to note that EHX owns a vacuum tube factory in Russia – a country which has a 35 percent tariff against its imports. With all this in mind, EHX will eventually have to reconsider its current pivots in strategy, and the brand may have to consider rising prices.
Matthews tells Bloomberg, “We’re gonna have to continue to buy our raw materials from overseas, even with the tariffs. Trump’s policy on tariffs will definitely bring very big companies into America for the manufacturing, but small and medium companies, their volume will not be big enough.” He adds, “I’ll have to scratch my chin to think about it – you know, can I still make a profit? You sort of just guesstimate. Like by raising your prices, what will that do?”
Matthews has already ruled out the idea of bringing circuit board manufacturing into the US as it would be “a really huge investment”. Further to this, he also reveals, “I am open and have been in the process of trying to sell the company. It’s a difficult time.”
Check out the current product range from Electro-Harmonix.
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Source: www.guitar-bass.net
