The price of imported goods in the USA is extremely relevant (and on topic) as itās likely to impact the cost of American made guitars imported into Europe.
I should point out that Iām not making a political statement here, and Iām not going to comment on the policy itself, but just on the potential effects of that policy.
Many US made products, including guitars, use a significant proportion of raw materials that are imported.
Consider a classic US made guitar, like a Gibson Les Paul. Itās American craftsmanship, but a significant proportion of the raw materials used are imported.
For example, for wood, Gibson use:
- Mahogany imported from Fiji and Guatamala
- Maple imported from Canada and Europe
- Rosewood imported from various locations
- Ebony imported from Africa and Asia
They do have USA sources for some of these, but the majority (according to my research) is imported.
Additionally, around 25% of the steel used in US manufacturing, and around 50% of the copper is imported from places like Chile, Brazil, Canada and Mexico. These are used for pickups, electrical components, strings, and other hardware
All of these are subject to tariffs of at least 10% and, in some cases, up to 32%.
Bear in mind they import these raw materials because either they are cheaper, better quality, or simply because they are unavailable in the US. They may not be able to switch to a US supplier at all, but even if they could it will mean using a more expensive or lower-quality source.
Assuming US equivalents are available and at the same quality, this will still be more expensive, perhaps even more so than continuing to import.
Whilst the official announcement talks about around 10% price increases on āimported goodsā, itās not clear how that calculation was derived and what they mean by āimported goodsā. Bear in mind that the minimum tariff level is 10%, it would not surprise me if that estimate includes āUS manufactured goods that use a significant proportion of imported raw materialsā.
So, I would not be surprised if, at the end of the day, the price of an American made guitar, like a Gibson Les Paul, rises significantly. And 10% doesnāt seem unreasonable.
Take that guitar and export it to Europe, where it will be subject to further tariffs, and you get a double-whammy. And here Iām talking about cost increases, not ātremoloā arms.
If the costs of manufacturing increases the wholesale price of a Les Paul by 10%, and Europe impose an additional (say) 10% on US imports, the result is a 21% cost increase to a typical European customer.
Cheers,
Keith